GROWTH  ER 


COMMON   SENSE 
AND  LABOUR 

BY 
SAMUEL    CROWTHER 


*  •• 

•  •  "  • 


GARDEN   CITY  NEW  YORK 

DOUBLEDAY,  PAGE   &  COMPANY 
1920 


COPTRIOHT,  1920,  BY 

DOUBLEDAT,  PAGE  k.  COMPANY 

ALL  RIGHTS  RESEBVED,  XNCLnDING  THAT  OF 

TRANSLATION  INTO  FOREIGN  LANGUAGES, 

INCLUDING  THE  BCANDmAVIAN 


OOPTRTGHT,   1919,  BY  A.  W.  SHAW  COMPANY 


CONTENTS 

CHAPTER  PAGB 

I.     The  Fundamental  Causes  op  Labour 

Unrest 3 

II.     The  Relation  Between  the  Employer 

AND  THE  Employed  ......  21 

in .     The  Worker  and  His  Wage  ....  50 

IV.     Wages  and  Profit-Sharing  Delusions  .  77 

V.     The  Fetish  of  Industrial  Democracy    .  Ill 

VI.     When  They  Get  Together    ....  136 

VII .     The  Economic  Truths  of  Work  .      .      .  171 

VIII.     The  Man  AND  the  Machine  ....  189 

IX.     The  Methods  and  Policies  op  British 

Labour 219 


4SSSS::^ 


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COMMON  SENSE  AND  LABOUR 

CHAPTER  ONE* 

THE  FUNDAMENTAL  CAUSES  OF  LABOUR  UNREST 

A  LARGE  employer  who  has  never  had  any  difficul- 
ties of  moment  with  his  workers  and  who  has  given  a 
great  deal  of  his  time  to  the  study  of  how  the  employ- 
ment relation  might  in  all  fairness  be  adjusted,  re- 
marked somewhat  hopelessly  the  other  day: 

"There  is  something  I  do  not  understand  in  my 
workers.  In  former  years,  we  have  always  been  able 
rather  easily  to  arrive  at  adjustments  and  I  have 
rather  prided  myself,  I  think,  upon  the  sincerity  of 
the  union  between  myself  and  those  I  employ.  I 
have  scientifically  worked  out  wage  payments  and 
they  have  always  been  satisfactory.  I  have  so  ad- 
justed my  affairs  that  the  volume  of  work  passing 
through  the  shops  seldom  decreases.  If  our  selling 
orders  drop  off,  we  produce  for  stock,  and  for  the  past 

•Reprinted  from  System,  tht    Maffoiine  of  Buntuai,  by  permission  of  A.  W.  Shaw 
Company. 


4  COMMON  SENSE  AND  LABOUR 

fiv^  '6r'  'iik  years  we  have  never  laid  off  a  man  be- 
cause there  was  no  work  for  him. 

"But  to-day  there  is  something  different,  there 
seems  to  be  something  stirring,  something  which  I 
cannot  comprehend  and  I  am  not  sure  that  the  men 
themselves  comprehend— for  I  have  talked  frankly 
with  many  of  them.  There  is  something  one  might 
almost  call  a  subconscious  "restlessness  that  makes 
them  seem  different.  I  cannot  put  my  finger  on  it 
and  say  *it  is  this'  or  *it  is  that.'  The  quality  eludes 
me." 

I  have  heard  the  same  sort  of  statement  from 
many  other  employers  variously  expressed,  and  un- 
doubtedly there  are  new  and  strange  currents  circu- 
lating through  the  minds  of  workers  everywhere.  It 
is  not  precisely  a  profound  dissatisfaction  with  labour 
as  a  means  of  livelihood.  It  is  not  so  much  wages 
and  hours,  for  although  wage  disputes  are  frequent 
enough,  they  very  often  seem  rather  to  be  pegs  on 
which  to  hang  trouble  than  real  causes  of  themselves. 
With  the  almost  universal  habit  of  eventually  grant- 
ing most  demands  for  wage  increases,  doubling  the 
increase  and  then  adding  it  into  the  cost  of  the  prod- 
uct, employers  generally  are  not  a  great  deal  con- 
cerned about  the  wages  they  pay. 


COMMON  SENSE  AND  LABOUR  5 

The  matter  of  hours  is  on  the  same  basis.  The 
desire  for  an  eight-hour  or  a  six-hour  day  would  be 
perfectly  comprehensible  if  the  workers  gave  any 
evidence  at  all  of  desiring  so  to  limit  their  working 
time,  but  they  seem  to  want  the  eight-hour  day  as  a 
basis  of  pay  and  not  as  a  period  of  work.  We  have 
had  several  strikes  because  the  request  for  the  eight- 
hour  day  was  granted  literally,  whereas  what  the 
workers  wanted  was  a  ten-hour  day  with  overtime 
during  two  hours  of  it. 

The  unions  have  no  answer.  They  have  gained 
the  eight-hour  day,  which  used  to  be  a  shibboleth, 
they  are  talking  of  and  also  succeeding  in  extending 
union  control,  but  beyond  that  they  have  only  vague 
formulas  and  some  interesting  excursions  into  inter- 
nationalism, possibly  with  the  thought  that  if  you 
cannot  set  your  own  house  in  order,  it  is  diverting  to 
poke  about  your  neighbour's  premises.  The  progress 
of  events  has  caught  up  with  trades  unions'  platforms 
and  the  workers  are  less  happy  than  ever  they  were. 

The  attitude  of  the  worker  is  curious;  his  outstand-i 
ing  characteristic  to-day  is  a  reluctance  to  work.     It^ 
is  extraordinarily  hard  to  buy  good  service  at  any 
price.    Per  man  production  has,  to  a  considerable 
extent,  dropped  off  in  America;  it  has  dropped  off 


6  COMMON  SENSE  AND  LABOUR 

50  per  cent.  Id  England  and  Germany.  It  is  hard  to 
get  men  to  work  at  any  wage.  You  will  rarely  meet 
with  a  manufacturer  or  a  retailer  who  is  not  seriously 
hampered  by  his  inability  to  obtain  employees. 

What  is  the  reason  for  this  restlessness  every- 
where.'^ 'Why  is  England  practically  on  her  back  and 
unable  to  produce?  Why  are  France,  Italy,  and 
Belgium  always  in  and  out  of  great  strikes .^^  Why  do 
you  find  such  an  intense  dissatisfaction  with  every- 
thing here.'* 

The  worker  cannot  tell  you.  When  he  is  in  the 
midst  of  a  strike,  he  can  express  some  specific  things 
which  he  thinks  he  wants  then  but  if  you  give  them 
to  him,  he  will  be  around  again  in  a  week  or  two  for 
something  more,  and  just  as  much  and  just  as  vaguely 
dissatisfied  as  he  was  before  he  went  on  the  strike. 

The  glib  answer  to  all  of  this  is  of  course  the  war, 
but  that  is  not  an  answer  at  all.  It  is  only  an  evasion. 
It  is  as  though  a  man,  being  asked  to  write  an  article, 
should  forward  a  dictionary  to  the  editor  with  a  com- 
ment that  he  would  find  all  that  he  desired  within 
its  covers  and  that  all  he  had  to  do  was  to  pick  out 
the  words  and  arrange  them. 

The  conduct  of  the  war  is  responsible  for  the  unrest 
of  the  working  man  to-day,  but  that  unrest  is  very 


COMMON  SENSE  AND  LABOUR         7 

slightly  a  reaction  of  the  years  of  surging  chaos.  It 
is  due  to  the  fact  that  the  war  activities  destroyed 
values — destroyed  the  relation  between  work  and 
production.  They  opened  up  to  the  unthinking  mass 
of  the  population  (employers  as  well  as  employees), 
a  vista  where  somehow  in  a  new  order  of  things  an  ex- 
istence might  be  possible  without  work — that  money 
is  something  of  itself  and  can  be  invoked  by  prayer 
or  by  blasphemy  as  a  kind  of  manna  from  above. 

Let  us  go  back  and  see  just  what  has  happened 
everywhere.  The  idea  prevailed  that,  because  in 
peace  times  and  in  isolated  cases  you  can  get  pro- 
duction by  offering  money,  the  vast  needs  of  war 
production  could  be  met  by  offering  money.  As  a 
matter  of  fact,  in  very  few  instances  was  the  produc- 
tion actually  greater  than  in  peace,  but  it  was  of  a 
different  character  and  because  it  came  in  one  order 
given  by  the  Government  rather  than  in  some  mil- 
lions of  orders  given  by  individuals;  the  very  size 
quite  naturally  dislocated  reason.  It  did  not  seem 
possible  that  such  amounts  could  be  produced  except 
by  extraordinary  and  dramatic  means.  It  did  not 
seem  possible  that  there  were  such  supplies  of  com- 
modities in  the  world.  If  you  will  look  back  you 
will  find  that  governments  bought  feverishly  with 


8  COMMON  SENSE  AND  LABOUR 

the  spectre  of  a  shortage  always  stalking  about  them. 
I  do  not  recall  any  commodity  which  somebody  or 
other  did  not  at  some  time  discover  to  be  short,  al- 
though the  actual  shortages  were  rare.  Whenever 
anybody  attempted  the  impossible  calculation  of 
how  much  of  any  one  commodity  was  in  this  coun- 
try, he  was  absolutely  certain  to  find  that  there  was 
not  enough  of  it.  The  example  of  the  member  of 
the  Quartermaster's  Department  who  happened  to 
be  let  loose  in  Spain  and  promptly  bought  4,000,000 
gallons  of  vinegar  for  our  army  was  not  unusual.  He 
was  not  suffering  from  the  hallucination  that  soldiers 
take  beauty  baths  in  vinegar.  It  was  simply  that 
the  amount  needed  passed  his  comprehension  and  he 
therefore  bought  an  incomprehensible  amount  of 
vinegar.  Probably  if  the  Spanish  producers  could 
have  dug  up  a  billion  gallons  he  would  have  bought  the 
bilhon.  He  was  only  one  of  many  thousands  who  in 
Washington,  in  London,  and  in  Paris,  with  infinite 
dignity  and  infinite  secrecy,  bought  everything  that 
could  be  bought. 

Here  in  the  United  States  we  at  no  time  during 
the  war  had  an  actual  shortage  of  labour,  but  the  com- 
panions of  the  commodity  shortage  sharks  discovered 
a  labour  shortage  and  they  convinced  employers  all 


COIVIIVION  SENSE  AND  LABOUR  9 

over  the  country  that  a  worker  was  a  rare  bird  and 
one  to  be  caught  and  kept  at  any  price.  The  workers 
were  not  slow,  because  they  were  human,  to  confirm 
this  impression  of  their  extraordinary  value. 

So  while  on  the  one  hand  the  Government  was 
buying  up  everything  that  was  to  be  bought,  they 
began  to  induce  employers  to  pay  enormous  amounts 
for  labour  service,  thus  throwing  into  the  world  an 
overpowering  buying  power  while  at  the  same  time 
taking  out  of  the  world  the  things  which  might  be 
bought.  The  quick  and  inevitable  result  was  that 
prices  began  to  go  up  and  the  high  wages  to  lose  their 
purchasing  power.  The  wages  had  to  be  raised  and 
then  in  order  to  quiet  popular  discontent  nearly 
everywhere  in  the  world,  the  governments  started  in 
to  fix  prices.  It  has  been  well  said  by  an  economist 
that  although  there  is  no  insuperable  economic  difli- 
culty  in  the  fixing  of  prices,  no  man  has  yet  been  born 
into  the  world  with  the  wisdom  to  fix  a  price. 

In  normal  times  a  price  is  not  fixed  by  any  one, 
although  every  little  while  a  few  producers  do  get 
clandestinely  together  and  think  they  fix  prices. 
Prices  are  fixed  by  the  law  of  supply  and  demand  and 
both  the  demand  and  the  supply  depend  upon  the 
cost  of  production.    The  fixing  of  a  single  price,  there- 


10        CO]VI]MON  SENSE  AND  LABOUR 

fore,  has  more  results  tangental  and  otherwise  than 
any  one  has  yet  been  able  to  estimate.  But  we  are 
here  concerned  with  the  effect  upon  the  cost  of  pro- 
duction. 

In  England  certain  prices  were  fixed  so  low  that  it 
became  necessary  for  the  government  to  subsidize 
producers,  thus  wholly  destroying  the  relation  with 
costs  of  production  and  fundamentally  dislocating 
the  foundation  of  British  labour. 

We  did  not  go  to  such  length  here  but  we  did 
madly  follow  the  theory  that  production  might  be 
had  merely  by  hanging  up  a  bag  of  money  in  front 
of  the  workers  as  one  suspends  a  bunch  of  hay  be- 
fore the  mouth  of  a  greedy  but  unimaginative  mule. 
As  time  went  on,  we  offered  more  and  more  money, 
although  as  a  result  we  did  not  get  more  and  more 
production.  In  most  instances  which  I  have  inves- 
tigated the  successful  production  came  about  through 
the  perfecting  of  means  and  almost  in  spite  of  the 
money  involved. 

Money  came  too  lightly;  a  man  soon  discovered 
that  he  might  get  almost  as  much  by  working  easily 
as  by  working  hard  and  of  course  he  worked  easily. 
In  spite  of  all  the  panegyrics  that  have  been  written, 
such  is  the  war  labour  record  everywhere.     The  facts 


COMMON  SENSE  AND  LABOUR        11 

were  not  made  public  but  in  every  country  the  per 
man  productivity  decreased  as  the  war  grew  older. 
You  can  say  that  it  was  due  to  war  strain  if  you  like, 
but  the  only  fact  of  interest  in  this  connection  is  that 
as  wages  increased  the  individual  productivity  de- 
creased, although  perfecting  of  machine  methods 
may  have  increased  gross  production,  and  in  America 
it  did.  But  the  effect  of  increasing  wages  and  de- 
creasing production  was  further  to  add  to  the  infla- 
tion of  values  which  is  always  the  companion  of  war. 
The  governments  had  unlimited  credits  and  they 
poured  unlimited  purchasing  powers  into  markets 
which  had  not  their  usual  supplies  of  ordinary  com- 
modities. Prices  shook  off  their  shackles  and  went 
a-soaring. 

The  worker  found  very  quickly  that  his  dollar, 
shilling,  franc,  or  mark  was  not  what  it  seemed  to  be 
and  of  course  that  aroused  his  resentment,  for  there 
are  very  few  people  who  have  the  slightest  idea  what 
money  really  is.  If  they  receive  something  which  is 
said  to  be  money  and  it  does  not  turn  out  to  be  worth 
face  value,  they  immediately  want  to  start  trouble. 
It  is  easy  for  an  agitator  to  convince  them  that  their 
money  has  been  depreciated  by  some  capitalistic 
trick  to  avoid  the  payment  of  high  wages. 


1^        COMMON  SENSE  AND  LABOUR 

As  the  Government  payments  everywhere  grew 
and  bank  credit  followed  bank  credit,  the  total  of 
bank  deposits  artificially  swelled  (for  every  credit 
is  also  reflected  in  the  deposit  account)  and  individual 
concerns  began  to  show  large  profits.  The  workers 
everywhere  in  the  world  viewed  this  accumulation  of 
capital  as  proof  certain  that  the  radicals  were  more 
or  less  right  in  saying  that  it  was  to  the  advantage 
of  capital  to  wage  war.  What  they  did  not  and  do 
not  realize  is  that  the  bank  deposits  are  largely  ficti- 
tious and  that  the  profit  balances  of  the  companies  are 
composed  of  the  same  sort  of  money  which  they  get 
in  wages — that  is  money  which  is  not  all  that  it  seems 
to  be. 

Apparently  their  delusions  are  shared  by  many 
employers,  otherwise  we  should  not  see  so  many  com- 
pany presidents  congratulate  themselves  and  their 
stockholders  on  the  profits  earned  in  war. 

Through  all  of  this  time  it  was  thought  necessary 
by  all  governments,  animated  by  the  surprising  but 
universal  idea  that  war  patriotism  is  confined  to  those 
in  authority,  to  urge  forward  all  workers  by  posters, 
advertising,  and  literature  to  the  general  effect  that 
the  labouring  man  was  the  second  line  of  defence,  that 
the  war  would  be  won  in  the  factories  and  so  on. 


COMMON  SENSE  AND  LABOUR        13 

The  employer  and  the  employee  alike  were  told  that  in 
accepting  a  government  contract  at  a  high  price  they 
were  performing  a  patriotic  duty,  a  duty  quite  as  high, 
although  different,  as  that  of  the  soldier  who  went 
into  the  field.     Profiteering  was  stamped  patriotic . 

The  soldiers  in  the  volunteering  days,  and  this  is 
especially  true  in  England,  were  promised  after  the 
war  everything  that  the  recruiting  speaker  happened 
at  the  moment  to  be  able  to  think  of.  In  England 
it  was  generally  represented  that  the  man  who  went 
out  to  fight  for  his  country  would  return  to  a  life 
of  such  luxury  that  the  chief  precaution  in  the  future 
would  be  to  see  that  he  was  not  cloyed  by  luxury. 
It  was  represented  to  him  in  effect,  if  not  in  actual 
words,  that  a  wise  and  wealthy  government  would 
care  for  him,  not  only  while  he  was  with  the  colours 
but  forever  thereafter  and  a  day. 

The  worker,  viewing  his  pay  more  or  less  on  pre- 
war standards,  concluded  that  governments  could 
pay  anything.  The  returning  soldiers,  having  had 
complete  support  through  some  years,  saw  no  par- 
ticular reason  why  the  government  should  not  con- 
tinue that  support  and  in  addition  felt  it  was  the 
duty  of  those  for  whom  they  fought  to  save  them 
from  want  as  they  went  back  into  civil  life.     "Being 


14        CO]VIMON  SENSE  AND  LABOUR 

saved  from  want"  depends  a  good  deal  on  the  point 
of  view  but,  generally  speaking,  on  the  receiving 
end  it  means  a  life  without  work. 

Up  until  the  time  of  the  Armistice  none  of  these 
matters  was  serious  because  few  people  had  the 
leisure  to  express  themselves.  Had  peace  been  made 
say  within  a  few  weeks  of  the  Armistice  and  all  re- 
strictions everywhere  lifted,  it  is  quite  probable 
that  industry  might  easily  have  returned  toan approx- 
imate normal  functioning.  But  as  peace  was  not 
made,  the  armies  of  England  and  of  Germany  were 
gradually  demobihzed  and  industry  could  not  absorb 
the  workers.  It  could  not  absorb  them  in  Germany, 
because  the  Allied  blockade  prevented  both  exports 
and  imports,  while  England,  although  not  blockaded 
by  a  recognized  enemy,  had  just  as  tight  a  cordon 
thrown  about  her  shores  by  a  multitude  of  govern- 
ment regulatory  boards  and  commissions. 

The  people,  not  finding  work,  at  once  turned  to 
their  governments  and  asked  that  the  promises 
of  support  which  had  been  so  freely  given  be  re- 
deemed. They  got  unemployment  allowances  and 
thereupon  absolutely  confirmed  the  growing  impres- 
sion that  it  would  be  easily  possible  to  live  without 
work  and  that  it  was  the  duty  of  the  corporation 


COMMON  SENSE  AND  LABOUR        15 

or  of  the  Government  to  support  its  employees  or  citi- 
zens without  any  value  being  returned  by  the  recipient 
of  the  bounty.  They  got  unemployment  allowances 
which  in  many  countries  were  as  great  or  greater 
than  the  pre-war  wages. 

The  unskilled  labourer  in  England  or  Ireland  re- 
ceived a  higher  allowance  from  the  government  than 
he  earned  as  wages  before  the  war.  In  Germany 
the  average  unemployment  allowance  was  actually 
double  the  average  pre-war  wage. 

It  will  be  said  at  once  that  these  figures  mean  noth- 
ing, for  the  purchasing  power  of  money  has  decreased, 
but  the  fact  that  money  has  a  variable  purchasing 
power  is  something  that  cannot  be  put  into  the  minds 
of  the  mass  of  the  people.  They  will  insist  on  high 
wages  in  order  to  live,  but  they  will  protest  against 
high  commodity  prices.  You  can  convince  one 
worker  out  of  every  twenty  thousand  that  unless 
you  have  high  production,  high  wages  mean  nothing, 
but  when  you  have  convinced  him,  he  will  not  leaven 
the  mass.  Trades  union  oflScers  and  politic  ans  find  it 
personally  profitable  to  support  the  proposition  that 
the  offensive  subject  of  work  should  not  be  introduced 
while  discussing  the  infinitely  lovely  topic  of  high 
wages. 


16        COMMON  SENSE  AND  LABOUR 

The  man  who  would  come  out  with  the  foUowing 
statement  would  be  hissed : 

"It  does  not  make  any  difference  how  high  wages 
are,  provided  they  are  represented  by  production. 
High  wages  and  high  production  make  the  ideal 
situation  in  industry,  but  let  me  tell  you  wdth  all 
emphasis  that  if  you  ask  for  high  wages  and  do  not 
offer  high  production,  you  will  never  attain  even  a 
living  wage,  no  matter  how  many  dollars  you  happen 
to  receive.  The  price  of  the  commodities  will  over- 
take and  pass  the  buying  power  of  your  wages." 

But  this  next  statement  would  be  applauded,  and 
it  is  made  every  day  in  the  week  in  ten  thousand 
places : 

"You  are  entitled  to  ten  dollars  a  day  and  a  six- 
hour  day,  five  days  a  week.  If  the  company  you 
work  for  cannot  pay  it,  then  take  the  company  and 
make  them  pay  it,  or  turn  around  and  make  the 
Government  pay  it.  What  did  we  fight  this  war  for, 
anyway?" 

The  first  statement  is  economically  true;  the  second 
statement  is  economically  absurd.  jNIany  of  those 
who  voice  the  second  statement  know  that  it  is 
absurd  and  make  it  only  for  the  purpose  of  bringing 
about  a  complete  disruption  between  capital  and 


COMMON  SENSE  AND  LABOUR        17 

labour,  so  that  capital  may  be  destroyed,  just  as 
Lenin  prints  money  as  fast  as  his  presses  can  turn 
it  out  in  order  dramatically  to  demonstrate  to  the 
people  that  money  is  useless.  The  second  theory 
has  gained  ground — as  in  Lawrence,  Seattle,  and 
Winnipeg — and  is  at  the  root,  expressed  or  unex- 
pressed, of  what  we  call  labour  trouble  everywhere 
in  the  world. 

The  reaction  to  the  paternal  war  control  is  that 
governments  exist  for  the  people,  that  they  are  some- 
thing apart,  and  derive  a  power  and  a  wealth  other 
than  from  the  citizens,  that  the  workingman  is  a 
privileged  person  who  produces  all  wealth  and,  there- 
fore, should  have  all  wealth,  even  though  he  does 
not  produce.  It  is  an  absurd  idea  but  it  finds  sanc- 
tion in  many  quarters  which  would  be  quick  to  re- 
sent the  implication  that  they  believed  any  such 
thing.  For  instance — "Give  a  Soldier  a  Job," 
**Pay  a  Living  Wage,"  "Be  Good  to  Your  Employ- 
ees," and  like  slogans  are  only  reflections  of  funda- 
mental paternalism. 

Quite  as  absurd,  however,  are  the  ideas  of  many 
capitalists  that  they  are  public  benefactors  in  employ- 
ing great  numbers  of  people;  that  they  do  a  man  a 
"favour"  when  they  hire  him  or  that  they  cannot 


18        COMMON  SENSE  AND  LABOUR 

cheapen  production  without  cheapening  the  hire  of 
the  human  element. 

A  few  employers  have  met  the  question  of  wages 
squarely,  have  paid  whatever  was  asked,  and  have 
made  up  for  the  high  wages  by  increasing  production 
through  better  methods,  and  have  cut  their  selling 
expense  ratio  through  a  more  rapid  rate  of  turnover. 
They  have  not  had  to  raise  their  prices  to  the  con- 
sumer and  they  are  making  money.  A  few  other 
employers  are  likewise,  through  frank  conferences, 
asking  the  men  what  can  be  done,  but  it  may  truth- 
fully be  said  that  the  majority  of  employers  every- 
where are  filled  with  precisely  the  same  idea  of  the 
sanctity  of  the  value  of  a  coin  that  the  workers  have. 
The  employers  have  often  turned  backward  toward 
what  they  think  are  the  old  values  and  of  course  they 
meet  with  the  great  body  of  workers  marching  for- 
ward to  the  new  values.  Since  both  the  employer 
and  the  employee  are  suffering  from  the  same  de- 
lusion but  apply  it  differently,  their  differences  often 
seem  to  be  scarcely  possible  of  reconciliation. 

The  serious  part  of  it  all,  however,  is  that  in  Eng- 
land and  on  the  Continent  unemployment  allowances 
have  broken  the  last  bond  between  wages  and  pro- 
duction and  are  so  rapidly  inflating  the  currency 


COMMON  SENSE  AND  LABOUR        19 

as  to  permit  the  thought  that  it  is  not  worth  while 
to  work  for  wages.  From  that  opinion  it  is  only  a 
step  to  the  theory  of  production  for  use  and  the 
entire  abolition  of  capital.  That  same  thought 
is  growing  in  the  United  States.  Thus  far  it  has 
not  to  my  knowledge  been  met  by  intelligent  argu- 
ment, but  merely  by  denunciation  and  by  somewhat 
silly  falsehoods  as  to  what  is  going  on  in  Russia. 
The  actual  truth  concerning  what  has  happened  in 
Russia  would  be  far  more  effective  than  police  raids 
and  investigations  by  uncommonly  stupid  legisla- 
tors. That  which  we  call  Bolshevism  is  not  a  cause 
but  an  effect. 

Another  reflex  of  the  war  and  its  concurrent  talk 
of  reconstruction  (which  talk  always  went  in  the 
direction  of  confirming  the  idea  that  the  State  owed 
a  duty  to  its  people  without  the  people  owing  a 
duty  to  the  State)  is  the  question  being  asked  every- 
where by  returned  soldiers:  "What  did  I  fight  to 
save?  ,  . 

He  did  not  fight  to  save  the  estate  of  his  employer;  f 
he  did  not  fight  for  the  right  to  work  hopelessly  at 
the  starvation  wage;  he  fought  perhaps  to  save  his 
home  and  fireside,  if  he  happened  to  have  one,  and 
if  he  did  not  have  one,  for  a  chance  some  time  to 


^0        COMMON  SENSE  AND  LABOUR 

get  one  if  his  fancy  turned  that  way.  He  wants 
recognition  as  a  human  being — a  somewhat  different 
recognition  from  being  handed  a  slip  by  a  foreman 
and  told  to  draw  his  pay  and  get  out  because  the 
foreman  does  not  feel  well  that  day.  He  does  not 
really  know  what  he  wants,  but  it  is  something  dif- 
ferent from  what  he  has.  Some  say  that  he  is  striv- 
.ing  for  the  recognition  of  the  dignity  of  labour  and 
[probably  they  are  right. 

i  And  so  it  goes  throughout  the  world — this  struggle 
of  unphrased  forces — this  conflict  of  emotions  which 
are  new,  incoherent,  and  which  send  a  man  willy 
/nilly  in  this  or  that  direction.  At  the  bottom  of  it 
all,  unseen  and  disregarded,  is  the  broken  relation  be- 
tween wage  and  production.  Because  they  broke 
that  relation  and  could  not  mend  it,  Bolshevism 
is  failing  in  Russia.  The  relation  is  the  foundation 
of  society.  It  is  the  foundation  of  our  House  of 
State  and  yet  we  mostly  prefer  to  tinker  with  the  roof. 


CHAPTER  TWO 

THE  RELATION  BETWEEN  THE  EMPLOYER  AND  THE 
EMPLOYED 

A  MANUFACTURER  in  the  Middle  West  spent  some- 
thing more  than  a  hundred  thousand  dollars  fitting 
up  the  roof  of  one  of  his  buildings  as  a  workingmen's 
club.  He  had  bowling  alleys,  billiard  and  pool 
tables,  plenty  of  easy  chairs,  free  lemonade  on  tap, 
and  a  special  elevator  which  could  carry  fifty  people 
at  a  time  and  make  the  trip  in  something  less  than 
half  a  minute. 

He  opened  the  club  with  a  big  bang  and  then 
settled  back,  satisfied  to  think  what  a  splendid  speech 
he  could  make  at  the  next  trade  convention.  The 
title  bothered  him.  Would  he  select  "Taking  the 
Workmen  into  the  Big  Family,"  or  "The  Place  of 
the  Beautiful  in  the  Labour  Relation".'^  The  second 
title  made  a  strong  appeal,  for  it  connoted  a  knowl- 
edge of  psychology  and  he  had  lately  heard  some 
interesting  lectures  on  psychology. 

On  the  opening  day  the  workmen  crowded  the 

«i 


22        COMMON  SENSE  AND  LABOUR 

club,  wandering  about  joyously  on  company  time, 
but  thereafter  the  clubbing  instinct  became  sub- 
normal. Day  after  day,  the  noon  hour  found  but 
half  a  dozen  or  a  dozen  men  using  the  facilities  which 
had  been  provided  for  a  thousand.  The  employer 
began  to  be  worried,  he  resented  the  disdain  of  his 
generosity,  and  finally  he  asked  a  friend  who  happened 
to  be  in  the  city  to  look  over  the  place  and  find  out 
what  was  the  matter.  This  friend  was  the  owner  of 
a  manufacturing  plant  in  Connecticut,  which  he  had 
built  entirely  by  his  own  efforts.  He  had  started 
as  a  workman  and  although  he  had  made  money, 
he  had  never  lost  his  perspective  and  was  always 
able  to  get  the  workers'  point  of  view.  He  looked 
over  the  place  and  then  he  reported : 

"You  have  one  of  the  finest  club  houses  I  have  ever 
seen.  You  also  have  an  extremely  well-fitted-up  em- 
ployment oflSce.  The  employment  manager's  office  is 
better  than  my  own.  I  have  never  felt  that  I  could 
afford  quite  so  much  good  mahogany. 

"Your  employment  manager  looks  and  acts  like  an 
executive  and  I  noticed  that  he  doesn't  waste  much 
time  on  the  applicants  for  jobs.  I  was  there  when 
a  Polak  came  in.  The  manager  asked  him  where  he 
had  worked  and  what  he  could  do.    Then  he  said: 


COMMON  SENSE  AND  LABOUR        23 

"  *I  have  a  job  for  you  at  $3.00  a  day,  you  can  take 
it  or  leave  it.' 

"The  Polak  took  it  and  went  on  into  the  shops. 
Now  let  me  ask  you  a  question.  Suppose  a  buyer 
came  in  to  see  your  sales  manager  and  the  sales  man- 
ager after  telling  what  you  had,  said: 

"'These  are  our  prices,  you  can  take  them  or 
leave  them' — what  would  you  do  with  him?" 

"I  would  fire  him,"  come  back  the  quick  retort. 

"Then  let  me  suggest  that  you  fire  your  employ- 
ment manager.  Hire  a  new  manager — pay  him  at 
least  $10,000  a  year  on  condition  that  he  never  wears 
a  white  collar  around  the  works.  Give  him  a  plain 
table  and  a  couple  of  benches  off  somewhere  in  a 
corner.  Tell  him  to  shake  hands  with  the  applicants 
for  jobs,  take  them  around  the  works,  show  them 
the  club  house,  and  act  generally  as  though  he  were 
trying  to  sell  the  plant  to  the  worker. 

"  The  reason  that  your  people  do  not  use  the  club 
house  and  are  generally  dissatisfied  is  that  you  have 
never  sold  the  company  to  them.  That  is,  you  have 
never  used  any  salesmanship  to  prove  to  them  that 
you  are  a  square  man  and  that  this  is  better  than  an 
ordinary  place  to  work." 

The  employer  took  the  advice,  dropped  his  speech 


24        COMMON  SENSE  AND  LABOUR 

for  the  time  being,  and  made  it  his  own  job  to  sell 
himself  and  the  company  to  the  men  he  employed — 
to  demonstrate  that  he  had  not  put  in  the  club  house 
in  any  spirit  of  charity  or  as  a  preliminary  to  cutting 
down  wages,  but  only  because  he  thought  it  was  right 
that  all — president  and  employees  alike — should  be 
able  to  have  a  good  time  while  they  were  on  the  job. 

Take  another  case.  Someone  had  persuaded  this 
particular  employer  that  it  was  good  policy  to  "take 
an  interest"  in  employees — that  he  was  temporarily 
guardian  of  the  careers  of  those  whom  he  employed 
and  it  was  therefore  his  duty  to  direct  them  into  the 
right  path  and  create  a  "happy  family  spirit."  He 
hired  a  social  worker — a  man  who  was  fairly  drunk 
with  the  milk  of  human  kindness  and  who  squared 
with  all  the  descriptions  of  those  who  are  said  to 
radiate  happiness.  This  man  did  radiate — he  even 
ramified  all  over  the  place. 

Here  is  a  reel  out  of  one  of  his  days. 

A  young  man  having  passed  the  employment  office 
and  being  properly  ticketed  and  numbered  was  sent 
out  to  this  social  relator — he  made  it  a  point  to  talk 
with  each  new  employee. 

"My  boy,"  began  the  ameliator,  suavely  and  be- 
nignly, "this  should  be  a  red  letter  day  in  your  career. 


COMMON  SENSE  AND  LABOUR        25 

You  have  to-day  become  a  part,  not  merely  an  em- 
ployee, of  a  great  organization  and  it  is  for  you  alone 
to  decide  how  far  you  shall  progress.  With  diligence 
you  may  become  president  of  this  company,  displac- 
ing perhaps  the  great  man  who  now  presides  over  us. 

"I  am  here  to  help  you,  to  give  you  advice  and 
counsel.  I  shall  watch  your  daily  doings  and  I  want 
you  to  come  to  me  often  and  I  want  you  to  promise 
me  to  learn  some  new  thing  every  day — no  matter 
how  small  it  may  be,  learn  something." 

The  boy  dutifully  promised  and  went  to  work. 
A  couple  of  days  later  the  social  secretary  met  him 
coming  from  the  direction  of  the  factory  hospital, 
looking  a  bit  rueful  and  tenderly  nursing  a  bandaged 
hand. 

"Well,  my  boy,"  beamed  the  secretary,  ''you  see 
I  haven't  forgotten  you,  what  have  you  learned  to- 
day.?" 

"I  learned  to  keep  me  fingers  out  of  the  cogs." 

Both  of  these  employers  really  thought  that  they 
were  doing  something  in  the  way  of  establishing  a 
right  relation  with  their  employees,  yet  neither  had 
given  the  slightest  thought  to  the  fundamentals  of 
that  relation.  The  first  established  an  employees' 
club,  just  as  he  might  have  endowed  a  hospital  or 


26        COMMON  SENSE  AND  LABOUR 

any  other  charity — although  he  would  have  resented 
any  remark  to  the  effect  that  he  held  his  people  to  be 
objects  for  charity.  The  second  man  really  took 
the  view  that  his  factory  was  a  good  place  for  a  little 
settlement  work  although  he  imagined,  with  perfect 
sincerity,  that  he  was  helping  his  people.  Both  men 
had  quite  involuntarily  adopted  the  paternal  ap- 
proach.    There  is  nothing  paternal  in  the  relation. 

Let  us  look  somewhat  coldly  at  the  bare  facts. 
The  employer,  representing  capital,  hires  a  man,  rep- 
resenting labour,  to  do  certain  work,  under  direction, 
so  that  an  amount  of  capital  may  be  put  through  a 
series  of  transformations  and  complete  the  cycle  of 
business  with  a  greater  value  than  when  it  started. 

In  swinging  through  the  cycle,  various  amounts 
are  paid  out  for  wages  and  other  expenses,  but  imless 
the  intent  is  to  have  the  capital  come  back  greater 
than  when  it  started,  the  operation  cannot  be  classed 
as  business.  If  the  capital  unintentionally  comes 
back  less  than  when  it  started,  the  business  is  unsuc- 
cessful. If  it  comes  back  greater,  then  the  business 
is  successful. 

There  is  nothing  essentially  eleemosynary  in  this 
relation  and  there  is  no  particular  reason  why  the 
person  or  persons  who  own  and  direct  the  progress 


COMMON  SENSE  AND  LABOUR        27 

of  capital  through  the  cycle  should  be  inclined  to 
regard  themselves  as  being  made  of  a  metal  different 
from  those  who,  as  employees,  add  to  the  value  of  the 
capital  in  its  progression.  It  is  but  natural  to  sup- 
pose that  those  who  own,  and  certainly  those  who 
direct  the  course  of  capital,  should  have  a  somewhat 
larger  mental  calibre  than  those  who  only  accelerate 
its  progress;  but  the  services  which  they  severally 
render  to  society  are  entirely  honourable. 

If  the  capital  returns  to  the  starting  point  without 
an  increment,  it  is  of  very  little  use  to  its  owner  and 
most  emphatically  there  exists  with  him  no  particular 
reason  for  again  starting  it  on  such  a  perilous  voyage 
' — because  it  might  come  back  from  the  next  trip  con- 
siderably battered. 

Unless  the  worker  finds  it  personally  profitable  to 
add  to  capital  as  it  passes  through  his  hands,  there 
is  no  particular  reason  why  he  should  work  and  there 
is  every  reason  why  he  should  turn  his  attention  to 
the  devising  of  some  means  of  living  without  work. 
If  work  does  not  bring  more  than  a  bare  existence  it 
can  hardly  be  said  to  be  worth  while. 

The  most  natural  thing  in  the  world  is  for  the  man 
whose  work  permits  him  only  to  exist,  to  turn  to 
something  which  promises  existence  without  work. 


28        COMMON  SENSE  AND  LABOUR 

Of  course,  the  second  line  leads  to  dishonesty,  but 
the  importance  of  being  honest  varies  with  the  point 
of  view.  The  man  who  has  nothing  does  not  fear 
the  thief.  Preaching  the  importance  of  property 
rights  to  those  who  have  no  property  is  about  as 
effective  as  preaching  in  Eskimo  purist  to  a  Hot- 
tentot. In  order  to  be  understood  we  must  have 
some  conceptions  in  common.  Even  if  one  could 
talk  mulese  it  is  very  doubtful  if  a  mine  mule  who 
had  never  seen  the  sky  would  be  deeply  interested 
in  aeronautics. 

We  like  to  dodge  the  terms  "capital"  and  "labour" 
and  to  say  that  they  are  not  distinct  entities  but, 
because  both  make  money  out  of  the  same  general 
set  of  circumstances,  that  their  interests  are  mutual. 

The  only  mutuality  that  exists  between  capital 
and  labour  is  of  the  variety  which  exists  between  a 
buyer  and  a  seller.  In  any  single  transaction  it  is 
to  the  interest  of  the  seller  to  get  the  highest  price 
and  to  the  interest  of  the  buyer  to  pay  the  lowest 
price.  They  are  in  a  sense  antagonists.  But  Amer- 
ican buyers  and  sellers  have  found  through  bitter 
experience  that  it  does  not  pay  to  cheat.  The  buyer 
has  learned  that  if  he  does  not  pay  a  fair  price,  the 
seller  skimps  the  goods,  while  the  seller  has  learned 


COMMON  SENSE  AND  LABOUR        29 

that  if  he  charges  too  much  the  buyer  will  not  get  his 
money's  worth,  either  in  service  or  on  resale,  and  will 
not  be  able  to  come  back  to  buy  again.  It  is  a  give 
and  take  arrangement  without  mutuality,  but  with 
natural  cupidity  tempered  by  forehandedness. 

Naturally  we  are  all  in  a  way  capitalists  and  also 
all  labourers.  Although  the  labourer  may  be  a  capi- 
talist when  he  has  a  dollar  in  his  pocket,  he  is  a  la- 
bourer and  nothing  more  when  he  works  for  hire, 
even  if  he  happens  to  have  a  million  dollars  in  his 
pocket.  The  capitalist  is  a  buyer  of  labour  and  the 
worker  is  a  seller  of  labour;  it  only  obscures  to  deco- 
rate the  capitalist  with  epithets  or  the  labourer  with 
encomiums.  There  is  no  moral  turpitude  involved 
in  being  either  a  labourer  or  a  capitalist.  The  work- 
man in  selling  his  services  may  profiteer — that  is,  he 
may  sell  a  poor  and  useless  thing  at  a  high  price. 
The  capitalist  as  a  buyer  may  seek  to  beat  down  the 
price  to  such  an  extent  that  the  seller  loses.  And 
also  he  may  be  a  defaulting  buyer.  But  these  are 
individual  and  not  class  characteristics;  there  is 
nothing  intrinsically  invidious  in  either  buying  or 
selling. 

But  the  parties  will  not  deal  with  each  other  con- 
tinuously unless  each  finds  some  sort  of  a  profit.    In 


30        COMMON  SENSE  AND  LABOUR 

the  case  of  capital  it  is  not  profitable  to  buy  labour 
unless  that  purchase  adds  sufficiently  to  the  value  of 
capital  to  make  its  engagement  worth  while.  In  the 
case  of  labour  it  is  not  profitable  to  sell,  unless  by 
reason  of  the  sale  there  results  a  full  family  life,  a 
horizon  as  wide  as  the  sight  of  the  seer,  which  means 
an  entire  opportunity  to  go  forward  as  far  and  as 
quickly  as  ability  propels. 

The  proponents  of  the  w^age  system — that  is,  of 
production  for  profit — say  that  it  is  perfectly  feasible 
to  bargain  and  sell  in  a  way  satisfactory  to  both  the 
buyer  and  seller.  The  opponents,  on  the  other  hand, 
say  that  this  relation  is  not  possible,  that  both  capital 
and  labour  must  be  abolished  and  a  new  system  of 
society  inaugurated,  in  which  capital  shall  be  owned 
in  common  and  production  be  solely  for  use  and  not 
for  profit.  This  is  essentially  the  present  Russian 
experiment.  These  two  systems  are  up  before  the 
world  to-day. 

Capital  believes  in  the  wage  system — it  believes 
in  itself — ^but  cool-headed  men  very  frankly  acknowl- 
edge that  they  do  not  know  how  to  apply  the  wage 
system. 

Labour  does  not  know  what  it  believes.  It  is 
uiore  or  less  in  the  position  of  a  drunken  man,  lurch- 


COMMON  SENSE  AND  LABOUR        31 

ing  down  the  street  with  a  very  indefinite  idea  of 
where  he  is  going,  and  sometimes  falling  on  the  capi- 
talist sidewalk,  and  again  on  the  anti-capitalist 
sidewalk.  Take,  for  instance,  a  recent  meeting  of 
the  American  Federation  of  Labour.  The  members 
set  themselves  resolutely  against  Bolshevism  (which 
is  essentially  production  for  use)  and  thus  declared 
themselves  in  favour  of  the  wage  system,  but  they 
applauded  every  attack  on  capital,  they  declared 
for  various  anti-capitalist  schemes,  and  one  man  in 
the  course  of  a  discussion  on  the  daylight-saving  law 
thought  he  had  made  a  splendid  point  against  it  by 
saying  it  enabled  employers  to  save  money!  They 
asked  for  wages  and  hours  without  a  word  as  to  re- 
sults and  seemed  to  repose  a  vast  confidence  in  sonor- 
ous phrases. 

The  average  employer  or  capitalist— rcall  him  what 
you  will — is  equally  at  sea.  He  puts  down  labour 
unrest  to  pure  cussedness,  j[ust  as  though  there  were 
any  particular  reason  why  a  man  should  work  if  he 
does  not  want  to  and  can  manage  at  the  same  time 
to  exist.  The  employer  is  apt  to  think  that  in  the 
management  of  capital  he  is  entitled  as  of  right  to 
the  service  of  such  individuals  as  he  may  desire  and 
at  the  wage  he  would  like  to  pay  them. 


32        COMMON  SENSE  AND  LABOUR 

Between  the  employer  and  the  employee  exists  for 
the  moment  a  vast  misunderstanding,  not  so  much 
of  each  other,  but  concerning  their  respective  aims 
and  what  they  are  really  trying  to  decide.  In  this 
confusion  it  is  those  who  have  given  least  attention 
to  the  theory  who  claim  the  greatest  public  attention. 
The  most  serious  quarrels  are  not  when  the  parties 
know  what  they  want,  but  when  they,  not  knowing 
what  they  themselves  want,  are  certain  they  are 
against  whatever  it  is  that  the  other  fellow  wants. 
When  words  and  reason  fail,  force  is  natural.  A  few 
employers  want  an  autocracy  of  capital  and  a  few 
employees  want  a  revolution — but  both  extremes 
form  insignificant  minorities  here.  The  parties  are 
equally  inarticulate  and  hence  they  tend  to  fight.  It 
is  a  reluctance  to  articulate  that  is  causing  employers 
and  employees  to  make  ready  to  do  a  number  of 
very  silly  things,  rather  than  sit  down  and  see  if  they 
really  know  what  it  is  all  about. 

Reduced  to  its  elements  the  question  is  not  com- 
plex. It  is  this:  Is  production  for  use  better  than 
production  for  profit  .'^ 

The  worker  wants  a  place  and  a  dignity  in  society. 
He  wants  an  opportimity  to  Hve  and  to  expand. 
When  he  says  he  detests  work  and  asks  for  very  short 


COMMON  SENSE  AND  LABOUR        33 

hours,  he  really  says  that  he  cannot  express  himself 
in  his  work  and  therefore  needs  an  outside  opportun- 
ity. 

Why  should  there  be  so  much  more  trouble  to-day 
than  yesterday?  Was  not  the  old  way  good  enough, 
and  where  are  we  going,  anyhow?  Has  a  new  ele- 
ment come  into  the  world  to  change  it  and  is  there 
no  way  out? 

The  quick  answer  is  the  war.  The  war  was  so 
big  and  its  effects  are  so  entirely  incomprehensible 
that  one  may  safely  blame  almost  anything  on  it. 
Has  the  war  really  anything  to  do  with  the  present 
situation? 

The  war  did  not  create  a  general  desire  to  live 
better;  the  war  did  not  give  birth  to  Lenin  and  his 
marvellous  faculty  for  winning  the  support  of  many 
people.  The  man  who  was  content  in  1913  to  work 
at  a  lathe  in  an  automobile  factory  through  ten  hours 
a  day  and  at  a  wage  is  not  different  from  the  man  who 
in  1920  professes  a  complete  disdain  for  the  successor 
of  that  lathe  and  says  that  if  he  works  at  all,  it 
is  going  to  be  for  a  precious  short  time  each  day  and 
for  a  lot  of  money.  The  mere  fact  that  this  man  hap- 
pened during  a  few  years  to  make  something  more 
frankly  designed  for  killing  than  the   automobile 


34        COMMON  SENSE  AND  LABOUR 

did  not  change  his  character.  Then  why  all  the 
row? 

Before  the  application  of  power  to  industry,  labour 
troubles  were  very  infrequent.  The  employer  did 
not  need  much  capital  to  begin  business.  Whoever 
owned  a  set  of  tools  might  start  up  on  his  own  ac- 
coimt  if  he  had  an  order  or  two  on  hand.  The  car- 
penter, the  plumber,  and  the  automobile  repair  man, 
among  others,  can  do  that  to-day.  One  man  form- 
erly worked  for  another  simply  because  he  lacked 
the  courage  to  venture  out  on  his  own.  As  the  ap- 
plication of  power  developed,  starting  a  business 
required  more  and  more  capital.  The  average 
worker  could  not  look  forward  to  working  for  himself. 

He  still  remained,  however,  a  craftsman  and  could 
exercise  an  intelligent  creative  skill  in  all  that  he  did. 
When  he  made  a  steam  engine,  it  was  his  steam  en- 
gine. He  and  his  fellows  had  worked  on  every  part — 
it  was  their  steam  engine. 

Then  came  the  sub-division  of  labour  wherein  a 
man  instead  of  building  all  of  one  thing,  built  only  a 
part.  Gradually  that  sub-division  became  more  in- 
tricate, imtil  now  in  thousands  of  cases  the  worker 
at  an  automatic  machine  has  but  a  slight  idea  what 
the  part  he  makes  is  intended  for,  and  no  idea  at 


COMMON  SENSE  AND  LABOUR        35 

all  as  to  whether  or  not  he  has  made  a  good  part. 
It  is  not  his  part.  The  opportunity  for  self-expression 
has  apparently  left  the  job.  Work  became  only  an 
uninteresting  ordeal  out  of  which  the  means  of  subsis- 
tence might  be  had.  Capital — ownership  of  the 
machine — became  the  whole  thing,  and  the  worker, 
feeling  his  inferiority,  bowed  to  capital.  And  capital, 
acting  after  the  manner  of  a  short-sighted  buyer, 
thought  only  of  buying  labour  at  the  cheapest  price. 
The  conditions  in  the  industrial  districts  of 
England — the  under-sized,  under-nourished  British 
Tommy — are  striking  evidences  of  how  far  that  domi- 
nation could  go.  We  did  not  go  so  far  here,  but  it 
must  be  said  in  all  frankness  that  the  continuous 
supply  of  ignorant  immigrants  gave  the  buyer  of 
labour  a  distinct  advantage  which  he  was  not  slow 
to  grasp.  We  like  politically  to  talk  about  the  great 
American  workman,  but  it  is  many  years  since  we 
had  any  American  workmen.  The  native-born 
American,  as  the  machine  became  more  prominent 
than  the  man,  passed  on  to  the  direction  of  industry, 
or  got  out  altogether.  The  newer  generation  took 
the  white  collar  and  went  into  the  offices,  so  that  to- 
day it  is  rare  to  find  a  native-bom  American  in  a 
shop. 


30        COMMON  SENSE  AND  LABOUR 

The  theory  that  the  machine  is  the  whole  thing 
is  a  fallacy.  It  has  been  demonstrated  that  no 
matter  how  perfect  the  machine  may  seem  to  be,  it 
is  more  effective  when  its  attendant  has  its  mastery 
than  when  he  is  but  a  human  adjunct. 

Robert  B.  Wolf  made  some  interesting  experiments 
in  this  line.  He  was  manager  of  a  large  paper  mill, 
turning  out  news  print.  One  of  the  most  important 
processes  is  that  in  which  the  wood  and  the  chemicals 
are  mixed  in  a  "cooker"  at  a  certain  temperature. 
The  quality  of  the  finished  product  depends  to  a  large 
degree  upon  the  evenness  of  this  process.  The  cook- 
ing machines  are  more  or  less  automatic  and  the 
labourers  attending  them  are  regarded  as  "unskilled." 
The  men  did  not  know  why  they  did  anything, 
neither  did  they  know  the  results  of  their  work. 

Mr.  Wolf  arranged  that  samples  of  each  heating 
should  be  taken  and  he  had  the  data  on  each  plotted 
on  a  chart  across  which  ran  a  straight  line  represent- 
ing the  standard  desired.  As  each  "cooking"  was 
finished  the  workers  had  before  them  in  dramatic 
form  the  results  of  their  work.  They  could  see 
whether  they  had  done  well  or  ill  and  very  quickly 
they  wanted  to  know  why.  If  one  lot  deviated  far 
from  the  standard,  they  investigated  to  discover  why 


COMMON  SENSE  AND  LABOUR        37 

that  had  happened  and  they  used  the  results  of  their 
investigations  on  the  next  lot.  This  mill  had  been 
turning  out  a  very  low  grade  of  pulp  which,  taking 
the  standard  as  a  hundred,  seldom  ran  above  eighty; 
within  six  months,  under  the  new  system,  the  men  were 
regularly  averaging  above  ninety-five.  What  is 
more,  they  turned  out  nearly  double  the  former 
quantity.  The  workers  gained  no  direct  financial 
benefit  from  their  increased  skill,  but  they  found  an 
interest  in  life  and  consequently  in  their  work  which 
they  previously  had  not.  That  is,  being  given  the 
knowledge  which  permitted  them  to  become  masters 
of  the  machine,  they  exercised  their  creative  instincts 
and  more  than  doubled  the  value  of  the  machine. 
Where  they  had  before  worked  shiftlessly,  they  now 
worked  steadily.  Considered  as  machines  these 
men  had  been  ineflficient;  considered  as  men,  they 
became  efficient. 

Sweeping  a  factory  floor  apparently^requires  a  mini- 
mum of  intelligence — any  one  can  sweep.  But  is  not 
a  job  which  requires  no  intelligence  the  better  for 
its  addition?  Take  this  instance.  A  factory  had 
twenty  men  who  wandered  about  sweeping  floors  with 
tender  regard  for  their  own  energy  and  stop- 
ping together  when  not  under  observation.    That 


38        COMMON  SENSE  AND  LABOUR 

factorj^  was  always  dirty.  An  engineer  broke  up 
this  leisurely  gang  and  divided  the  factory  floor  space 
into  zones,  varying  in  size  according  to  the  amount 
of  debris  which  daily  collected.  He  put  a  sweeper 
in  charge  of  each  of  these  zones  and  made  it  the  duty 
of  that  man  to  keep  that  zone  always  clean.  Inspec- 
tion might  occur  at  any  time.  If  the  floor  were  clean 
the  sweeper  got  a  mark  which  entitled  him  to  a  spe- 
cific addition  to  his  wages.  Within  a  month  ten 
men  were  keeping  that  factory  spotlessly  clean  and 
none  of  them  w^as  working  as  hard  as  before.  In- 
stead of  a  shiftless  gang  always  dodging  work,  there 
were  substituted  a  number  of  intelligent  caretakers 
each  of  whom  made  much  more  money  than  a  sweep- 
ing job  is  supposed  to  pay — yet  it  cost  the  company 
considerably  less  for  sweeping  than  before.  \Miat  is 
more  to  the  point,  they  had  a  clean  factory  instead 
of  a  dirty  one. 

But  in  general,  industry  has  not  to  any  large  de- 
gree recognized  the  human  factor  excepting  as  some- 
thing which  might  be  stimulated  to  more  intense 
work  by  hanging  up  a  money  bag.  This  is  in  appar- 
ent contradiction  to  welfare  work — ^to  the  prevail- 
ing desire  to  provide  better  living  conditions,  cleaner 
shops,  and  facilities  for  amusement  and  recreation. 


COMMON  SENSE  AND  LABOUR        39 

But  these  provide  for  humanizing  surroundings — not 
the  work  itself. 

The  worker  has  simply  been  a  machine — a  mere 
adjunct  without  a  place  in  society.  Regardless  of 
whether  his  work  was  big  or  little,  high-paid  or  low- 
paid,  he  was  hired  only  because  he  could  do  some- 
thing which  no  machine  had  yet  been  designed  to  do. 
The  impotence  of  that  position  is  being  resented,  and 
if  you  will  investigate  the  more  recent  strikes  you 
will  discover  that  wages  and  hours  are  not  the  real 
causes,  but  are  merely  convenient  modes  of  expres- 
sion. Most  of  the  strikes  abroad  are  against  capital  as 
such,  although  they  are  expressed  in  money  and  hours 
values.  For  instance,  in  the  great  Clyde  strike  in 
1919,  the  leader  told  me  very  frankly  that  they  were 
asking  for  forty  hours  and  higher  wages,  not  in  the 
expectation  or  with  any  particular  desire  of  getting 
them,  but  simply  because  they  wanted  to  ask  for 
something  the  employer  could  not  give  and  if  their 
demands  were  gratified,  then  they  would  again  strike 
for  still  shorter  hours  and  still  greater  pay,  until 
finally  capital  would  throw  up  its  hands  and  quit. 
They  wanted  to  go  on  to  production  for  use.  The 
I.  W.  W.  follows  the  same  theory  here,  while  most 
of  the  unions  that  presently  sanction  strikes  in  Amer- 


40        COMMON  SENSE  AND  LABOUR 

ica  couple  union  recognitioh  with  the  money  de- 
mands. Union  recognition  is  only  a  step  toward 
greater  dignity  for  the  worker.  It  is  the  loss  of  posi- 
tion and  dignity  which  hurts  the  worker  and  espe- 
cially here  in  America  where  we  have  so  little  class 
consciousness. 

The  unions  are  in  an  anomalous  position  in  all  this. 
They  say  that  they  want  the  ** closed  shop"  and  union 
recognition,  in  order  to  make  collective  bargaining 
universal  and  thereby  force  the  very  highest  rate  of 
wages.  They  want  high  wages  and  low  prices,  which 
two  desires  are  not  in  the  least  incompatible,  but 
which  the  unions  render  incompatible  by  opposing 
the  introduction  of  such  methods  as  are  directed 
toward  making  high  wages  also  spell  high  produc- 
tion. The  unions  have  had  to  oppose  these  methods 
because  most  of  them  were  directed  toward  forcing 
the  worker  to  a  pace  which  hurt  his  health;  in  order 
to  satisfy  their  constituents  they  have  had  to  op- 
pose all  methods,  good  or  bad,  which  lead  to  better 
work. 

They  have  had  to  oppose  high  production  also, 
because  the  theory  is  widely  held,  especially  in  Eng- 
land, that  there  is  only  a  certain  amount  of  work 
in  the  world  to  do.    There  it  resulted  in  the  strict 


*j 


COMMON  SENSE  AND  LABOUR        41 

limitation  of  production  on  the  theory  that  the  less 
work  a  man  did  the  more  men  would  find  work.  Be- 
fore the  war  if  an  English  manufacturer  introduced 
a  machine  capable  of  turning  out  a  thousand  parts 
a  day,  and  the  worker  with  his  old  machine  had  been 
capable  of  turning  out  only  500  parts  a  day,  then  the 
union  would  either  set  a  limit  on  the  new  machine 
of  500  parts,  or  so  raise  the  rate  that  the  increased 
efficiency  of  the  machine  would  be  absorbed  in  the 
higher  wage.  The  English  unions  removed  the  limit 
on  production  for  the  period  of  the  war,  and  although 
it  is  popularly  supposed  that  they  have  now  agreed 
not  to  re-establish  those  limits,  I  could  not  find,  while 
in  England  recently,  any  actual  evidence  that  the 
unions  had  taken  on  a  new  economic  theory.  On 
the  contrary,  unemployment  has  served  to  strengthen 
the  old  theory,  and  in  cases  where  the  restriction  of 
output  was  removed,  the  men,  with  or  without  the 
sanction  of  the  union,  immediately  replied  by  striking 
for  hours  so  short  that  even  the  former  limit  of  pro- 
duction could  not  easily  be  reached. 

It  should  be  perfectly  apparent  to  everyone 
that  the  progress  of  industry,  if  it  is  to  increase,  has 
to  be  constantly  in  the  direction  of  the  cheapening 
of  output.     It  takes  only  a  moment's  thought  to 


42        COMIVION  SENSE  AND  LABOUR 

prove  the  fallacy  of  the  theory  that  there  is  only  so 
much  work  in  the  world  to  be  done.  The  buying 
power  of  a  people  cannot  be  estimated.  Yet  em- 
ployer and  employee  alike  think  that  markets  have 
limited  capacities.  Because  a  certain  country  bought 
5,000  automobiles  in  one  year  at  a  price  is  some  in- 
dication that  in  the  next  year  it  will  probably  buy 
at  least  that  many  at  the  same  price.  On  that  theory 
unions  limit  production  and  owners  make  desperate 
efforts  to  keep  competitors  out  of  the  market.  But 
if  we  lower  the  price  of  an  article,  then  we  tap  a  new 
buying  power  which  cannot  be  estimated  and  we 
provide  more  work  for  the  workers.  They  have 
more  money  to  spend  and  further  swell  this  new 
buying  power. 

The  Ford  car  is  the  best  illustration  of  how  lower- 
ing a  price  not  only  uncovers,  but  adds,  to  hidden 
purchasing  resources,  and  the  extraordinary  part 
of  it  all  is  that  the  sale  of  the  inexpensive  Fords 
seems  to  increase  the  demand  for  more  expensive 
motors — which  only  goes  to  show  that  probably  one 
of  the  reasons  we  have  not  found  a  way  to  correlate 
the  parts  of  industry  is  that  we  really  do  not  know 
what  industry  is. 

No  economist  has  yet  been  able  to  trace,  in  other 


COMMON  SENSE  AND  LABOUR        43 

than  the  most  superficial  manner,  the  relation  be- 
tween price  and  demand.  We  can  find  in  a  single 
year  that  lowering  the  price  of  a  single  article  increases 
the  demand  for  that  article  by  so  much,  but  we  do 
not  know  how  greatly  the  demand  for  other  articles 
is  increased  thereby.  About  all  that  we  can  safely 
say  is  that  no  single  factor  in  industry  is  static.  The 
productive  capacity  of  a  man  or  machine  is  not  static 
and  neither  is  the  buying  power  of  a  market,  for  both 
of  these  depend  finally  upon  the  ingenuity  of  the  in- 
dividual, which  is  something  which  cannot  be  mapped 
and  charted. 

If  any  accurate  national  statistics  have  ever  been 
compiled  anywhere,  which  I  doubt — certainly  the 
most  accurate  would  have  been  compiled  in  Germany. 
(Among  the  various  crimes  for  which  Germany  might 
well  be  tried,  not  the  least  is  the  responsibility  for 
the  present  international  passion  for  statistics.) 
But  take  their  estimates  of  the  food  supply.  When 
I  was  in  Germany  in  March,  1919,  the  government 
had  divided  up  all  the  food  of  the  country  on  a  per- 
capita  basis  and  had  rationed  it  out  in  miserable  little 
doles  at  fixed  prices.  That  was  all  the  food  which 
the  most  accurate  statisticians  in  the  world  could 
discover  in  Germany.    But  I  could  not  find  a  single  in- 


44        COMMON  SENSE  AND  LABOUR 

dividual  who  was  not  consuiliing,  in  addition  to  his 
ration,  at  least  three  times  as  much  food  bought  on 
the  outside,  and  the  well-to-do  people  not  infrequently 
did  not  even  bother  to  draw  their  rations.  In  the 
cold,  clear,  statistical  eye  of  the  government  this 
additional  food  did  not  exist,  because  it  was  not  on 
their  ledgers. 

Coming  back  to  the  field  of  labour,  statistics  here 
are  equally  useless,  except  as  affording  material  for 
the  compiling  of  startling  tabulations  on  the  state 
of  the  nation.  New  York,  beginning  about  1915, 
developed  an  uncontrollable  desire  for  social  work 
and  an  equally  uncontrollable  desire  that  each  bit 
of  work  should  start  with  a  comprehensive  census. 
Somebody  wanted  to  take  up  farm  labour  in  a  serious 
way  and  of  course  they  began  with  a  census.  They 
delegated  the  school  teachers  all  over  the  state  to 
discover  from  the  farmers  of  their  districts  how  many 
hired  men  would  be  required  during  the  year.  The 
farmers,  since  it  did  not  cost  anything  to  hire  a  man 
mentally,  were  liberal  in  their  estimates.  A  farmer 
who  had  been  accustomed  to  getting  along  with  one 
additional  man  thought  that  he  could  use  three  in 
the  spring,  four  in  the  harvest,  and  perhaps  two  in 
the  fall.    Thus  he  put  down  that  he  needed  nine  men. 


COMMON  SENSE  AND  LABOUR        45 

The  investigators  also  compiled  itatisticB  on  the 
number  of  farm  hands  available. 

T\Tien  the  results  were  tabulated  at  Albany,  they 
were  indeed  startling.  Comparing  the  number 
of  men  needed  with  the  number  of  men  available, 
there  did  not  seem  to  be  a  chance  in  the  world  that 
New  York  would  be  able  to  plant  or  harvest  any 
crops,  and  out  went  the  news  that  New  York  was  in 
a  shocking  way  for  farm  help.  Then  somebody  hap- 
pened to  note  that  the  demand  for  farm  labour  was 
several  times  greater  than  what  had  been  thought  to 
be  the  entire  agricultural  population  of  the  State, 
which  seemed  odd  indeed.  They  checked  the  census 
in  a  few  districts  and  found  enough  errors  to  with- 
draw all  the  results.  But  in  the  meantime,  the  farm 
labourers  of  New  York  had  been  officially  informed 
that  they  were  among  the  rarest  and  most  valuable 
creatures  on  earth  and  they  fixed  their  wages  accord- 
ingly. That  census  was  checked;  most  census  re- 
turns are  not. 

For  instance,  at  no  time  during  the  war  was  there 
a  shortage  of  labour,  yet  a  Government  census  com- 
piled on  much  the  same  lines  as  the  New  York  farm 
census  showed  such  a  shortage  that  employers  every- 
where started  bidding  wildly  for  men. 


46        COMMON  SENSE  AND  LABOUR 

When  we  start  out  to  remake  society  on  the  basis 
of  statistics,  it  is  perfectly  certain  that  we  shall  break 
something,  but  it  is  not  at  all  certain  that  we  shall 
make  anything.  What  the  world  succeeded  in 
breaking  during  the  war  was  the  relation  between 
profits  and  production. 

High  wages  and  high  profits  can  be  legitimately 
.earned  only  by  improvements  in  methods  which 
lower  the  price  of  the  finished  article.  Then  the 
wages  and  the  profits  retain  their  purchasing  power. 
But  when  wages  and  profits  are  obtained  by  adding 
to  the  price,  the  actual  increase  in  purchasing  power 
is  but  temporary.  The  increase  romps  around  the 
circle  and  both  the  employer  and  the  employee  find 
that  the  additional  money  they  thought  they  had 
made  does  not  really  amount  to  anything.  This 
is  so  self-evident  that  it  is  never  recognized. 

The  cost  of  living  is  regulated  by  the  cost  of  produc- 
tion but,  during  the  war,  the  cost  of  production  being 
disregarded,  wages  were  soon  demanded  on  the  basis 
of  the  cost  of  living,  and  capital's  profits  were  like- 
wise so  based. 

The  Emergency  Fleet  Corporation  gives  probably 
the  best  sample  of  the  absolute  destruction  of  any 
relation  between  cost  and  production.    That  cor- 


^f-M 


COMMON  SENSE  AND  LABOUR        47 

poration,  having  undertaken  a  job  far  too  big  for 
any  human  organization,  thought  it  might  accom- 
plish miracles  by  spending  money.  It  spent  the 
money  but  did  not  accomplish  the  miracles.  It  had 
all  kinds  of  welfare  workers,  all  kinds  of  employment 
policies,  and  also  an  infinite  number  of  employment 
experts,  but  the  efficiency  of  labour  was  less  than 
40  per  cent,  and  did  not  begin  to  approach  the  effi- 
ciency of  the  baseball  teams  by  which  the  units  were 
so  adequately  represented. 

I  have  noted  that  the  progress  of  industry  pro- 
duced a  situation  in  which  the  work  did  not  absorb 
the  creative  instincts  of  the  individuals.  The 
Emergency  Fleet  workers  found  more  to  interest 
them  in  their  baseball  teams  than  they  did  in 
their  work.  They  could  not  be  attracted  to  work 
by  money. 

Considering  all  these  factors,  is  there  any  particular 
reason  why  industry  should  not  be  disturbed.'^  If 
the  work  itself  does  not  satisfy  and  the  money  which 
one  gets  for  the  work  does  not  satisfy,  then  what  is 
left.^  If  we  seek  to  justify  the  wage  system,  is  it 
not  entirely  necessary  to  have  an  expression  of  wages 
in  terms  of  production? 

The  public  is  patient  and  long  suffering,  but  when 


48        COMIVION  SENSE  AND  LABOUR 

any  group  of  employers  or  employees  get  together 
and  decide  that  each  will  take  a  fine  big  wad  of 
money  and  pass  on  the  cost  to  the  public,  the  public 
eventually  gets  its  revenge — although  quite  uninten- 
tionally— by  destroying  the  purchasing  value  of  the 
increments  which  the  producers  have  so  blithely  di- 
vided among  themselves. 

If  employers  and  employees  believe  that  it  is  the 
count  of  money  and  not  the  purchasing  power  that 
matters,  and  if  they  conceive  that  the  democratic 
control  of  industry  is  for  the  purpose  of  presenting 
a  united  front  against  the  public,  then  they  can 
only  prove  in  the  end  either  that  the  Bolshevists  are 
right,  or  at  least  that  they  are  not  wrong  and  that 
the  wages  system  is  a  failure. 

But  there  is  no  need  for  that  pessimistic  view. 
Throughout  the  country  a  great  deal  of  common 
sense  is  at  work  and  there  is  a  growing  conception 
that  capital  and  labour  are  complementary,  that  it  is 
perfectly  possible  to  effect  a  bargain  and  sale  with  a 
reasonable  profit  to  both  sides  and  without  more  than 
a  natural  amoimt  of  bickering.  And  further,  that 
there  is  enough  slack  in  industry  to  provide  for  good 
wages  and  profits  without  raising  ultimate  prices. 

When  a  bank  hires  a  president  for  $50,000  a  year, 


COMMON  SENSE  AND  LABOUR        49 

the  operation  is  not  one  of  stilted  acrimony,  but  an 
amiable  give  and  take  without  a  loss  of  dignity  on 
either  side. 

Why  is  there  no  trouble  here?    Because  they  are 
dealing  on  a  level  plane.    Which  points  the  way  out. 


CHAPTER  THREE 

THE   WORKER   AND   HIS   WAGE 

They  wanted  lathe  hands  and  they  wanted  them 
badly.  The  lid  had  been  taken  off  costs.  All  that 
the  Government  asked  was  production,  and  to  the 
factory  management,  production  meant  men  and 
more  men. 

Jim,  we  shall  call  him,  slouched  into  the  employ- 
ment office.  In  ordinary  times  he  would  have  passed 
back  through  the  door  faster  than  he  came  in,  for  that 
establishment  did  not  employ  **rum  hounds"  or 
tramps,  and  Jim  was  obviously  both,  but  the  place 
needed  men.  And  Jim  answered  the  general  descrip- 
tion of  a  man. 

"Can  you  run  a  lathe .^"  the  employment  agent 
asked,  skeptically. 

"Sure,"  came  from  Jim,  nonchalantly,  "any  of 
your  tools." 

"All  right,"  said  the  agent,  "I'll  put  you  to  work." 

This  was  supposed  to  be  a  first-rate  company. 
It  called  itself  "efficient";  it  had  welfare  work,  all 

50 


COMMON  SENSE  AND  LABOUR        51 

kinds  of  mechanical  conveyors,  a  gross  or  so  of  "Do 
it  Now"  signs,  and,  since  it  had  taken  on  munitions 
work,  Liberty-Bond,  Win-the-War,  Red-Cross,  War- 
Saving-Stamps,  and  nearly  every  other  kind  and 
variety  of  poster  decorated  the  entrances  and  the 
blank  walls  of  the  shops.  The  management  prided 
itself  on  being  up  to  date  and  hustling. 

Jim  went  to  work  on  a  lathe,  his  particular  job 
being  known  as  the  "second  rough  turn,"  which 
means  that  the  shell  forgings  were  turned  to  the 
point  where  they  had  just  enough  rough  metal  left 
to  be  cleaned  up  on  the  finishing  operation.  Jim 
soon  found  that  his  lathe  was  not  well  suited  for  the 
work — but,  being  on  day  rate,  it  did  not  concern  him 
much.  He  was  more  interested  in  what  he  was  going 
to  get — not  what  the  company  would  get.  So  at 
noon  he  made  a  play  for  an  advance  in  pay  and  got 
it. 

The  lathe  operation  at  first  seemed  right  enough; 
they  used  a  light  feed  making  two  cuts.  A  heavier 
feed  did  not  seem  possible.  The  very  novelty  of 
being  at  work  again — although  it  was  only  choice 

that  had  kept  him  out  of  work — roused  in  Jim  some- 

thing  of  the  old  craftsmanship.  He  saw  that  the 
way  the  tool  was  ground  caused  it  to  absorb  too  much 


52        COMMON  SENSE  AND  LABOUR 

power.  This  particular  firm  allowed  its  hands  to 
grind  their  own  tools.  Jim  reground  his  and  found, 
as  he  had  expected,  that  the  whole  operation  could 
be  done  in  one  cut  instead  of  in  two,  and  then  a  little 
more  experimenting  convinced  him  that  a  higher 
speed  might  be  used.  The  net  result  was  that  by 
noon  of  the  second  day  he  raised  his  output  of  six 
shells  per  hour  to  twelve.  Jim  was  rather  inclined 
to  be  proud  of  himself. 

At  the  noon  hour  the  man  on  the  next  machine, 
whose  name  happened  to  be  Slim,  sidled  up  to  Jim, 
and  asked  somewhat  cautiously,  "  Got  a  union  card?  " 

"No,"  snapped  Jim,  **and  I  ain't  going  to  get 
none." 

In  the  middle  of  the  afternoon  the  foreman,  who 
had  hitherto  given  no  attention  whatsoever  to  Jim, 
held  a  moment's  conversation  with  Slim  and,  turning 
to  Jim,  demanded: 

"What  are  you  trying  to  do,  wreck  that  machine?  " 

"Do  you  see  it  falling  apart?"  snapped  Jim. 

The  foreman  did  not  answer.  Instead  he  turned 
to  Slim:  "Show  that  guy  how  to  run  his  machine." 

"Have  you  got  that  card  yet? "  was  the  instruction 
from  Slim. 

"No,"  came  back  from  Jim,  "are  you  capping  for 


COMMON  SENSE  AND  LABOUR        53 

the  union?  What  do  you  get  out  of  it?  What's  the 
matter  with  me,  ain't  I  doubled  the  production? 
There  ain't  a  machine  in  this  place  that  is  doing  half 
what  it  ought  to." 

**  You  can  that  stuff,"  said  Slim.  "  We  are  looking 
out  for  ourselves.  If  we  doubled  up  we  would  catch 
up  with  the  forgings  and  half  of  us  would  get  the 
gate.  Anyhow,  I  ain't  going  to  break  my  back  lug- 
ging that  many  forgings.  When  are  you  going  to  get 
your  card?" 

**I  ain't  going  to  get  any." 

**You  ain't,  eh,  that  will  be  all  for  you,"  snarled 
Slim,  and  beckoning  to  the  foreman  he  went  on: 

"This  guy  don't  know  nothing  about  a  lathe. 
He'll  smash  this  one  before  the  day  is  out." 

The  foreman  lost  no  time:  "Go  get  your  money 
and  beat  it." 

"Beat  it?  Where's  the  super?"  yelled  Jim,  thor- 
oughly mad. 

"The  super  won't  see  you,  I'll  attend  to  that," 
grinned  the  foreman.  "All  you've  got  to  do  is  to 
beat  it." 

Jim  got  his  money  from  the  cashier's  cage,  then 
determinedly  he  headed  to  the  general  manager's 
office  only  to  be  sent  from  there  without  a  hearing 


54        COMMON  SENSE  AND  LABOUR 

to  the  superintendent,  whose  stenographer  quickly 
shifted  him  to  the  employment  office,  and  in  another 
minute  he  was  out  on  the  road  again.  The  intelli- 
gent employment  manager  informed  him  on  the  way 
out  that  he  wished  bums  would  keep  away  from  that 
plant. 

Some  weeks  later  the  president  of  the  company, 
in  consternation  because  the  plant  was  steadily  run- 
ning behind  the  government  production  schedule, 
retained  an  industrial  engineer  of  reputation,  who, 
after  a  very  little  study,  brought  all  of  those  machines 
to  the  one-cut  basis  and  increased  the  speed  of  the 
feed,  thereby  saving  216  seconds  on  this  one  opera- 
tion alone  and  increasing  the  per-machine  production 
of  67  shells  in  a  ten-hour  day  to  128  shells. 

The  contract  was  for  haK  a  million  shells  and  the 
men  on  this  operation  were  paid  $5  a  day.  Trans- 
lated into  dollars  the  saving  in  labour  on  this  single 
operation  of  the  contract  was  $15,000,  and  that  with- 
out taking  into  account  the  saving  on  overhead  ex- 
pense. 

If  you  will  just  think  over  that  incident  you  will  get 
a  clue  as  to  what  wages  really  mean — and  when  they 
are  high  and  when  they  are  low,  and  that  the  amount 
of  a  wage  is  not  an  absolute  but  only  a  relative 


COMMON  SENSE  AND  LABOUR        55 

fact.  When  Jim  entered  that  shop  the  wages  were 
too  high  regardless  of  the  profits  of  the  company  or 
any  other  factor;  because  full  value  was  not  being 
given  for  wages.  Such  a  wall  of  ignorant  prejudice 
had  been  erected  that  any  suggestion  for  better 
methods  was  resented.  The  suggestor  found  himself 
out  on  the  street,  a  "bum" — ^yet  every  man  in  that 
department  might  have  increased  his  pay  by  one 
third  without  working  a  bit  harder  than  he  did  be- 
fore. The  foreman  and  the  men  did  not  know  their 
business  and  the  management,  being  ignorant  of  such 
a  condition,  therefore  did  not  know  its  business. 

It  seems  almost  incomprehensible  that  a  man 
should  be  fired  for  suggesting  a  better  way  to  work, 
yet  in  two  thirds  of  the  manufacturing  concerns  of 
the  United  States  a  suggestion  that  there  is  a  better 
method  will  be  met  by  a  snarling,  "Who's  running 
this  place,  any  way  .^^  Your  work  ain't  none  too  good 
at  that."  And  an  insistence  on  the  suggestion  will 
be  considered  such  a  personal  insult  that  the  man 
will  be  slated  for  firing  at  the  first  convenient  oppor- 
tunity. 

The  curious  part  of  it  all  is  that  in  most  discussions 
of  wages,  what  the  man  does  for  a  wage  is  seldom 
considered,  while  page  after  page  of  testimony  is 


56        COMMON  SENSE  AND  LABOUR 

taken  as  to  how  much  it  costs  to  live,  although  it 
must  be  self-evident  that  as  long  as  we  work  under 
a  wage  system,  if  production  be  not  returned  for 
wages,  then  a  living  wage  can  never  exist.  Inev- 
itably a  wage  paid  which  is  not  wholly  earned  must 
be  added  into  the  price  of  the  finished  product  and 
eventually  raise  the  price  of  all  products,  so  that  when 
the  wage  earner  goes  to  buy  he  is  bound  to  find  his 
money  insufiicient. 

Two  glaring  examples  of  this  are  England  and 
Germany  to-day.  In  both  countries  great  numbers 
of  people  are  getting  unemployment  allowances. 
They  are  paid  for  doing  nothing,  while  those  who 
are  at  work  are  giving  but  little  in  return  for  their 
wages.  The  consequence  is  that  the  price  of  all 
commodities  is  so  high  that  although  the  workers 
are  receiving  unheard-of  sums  they  are  not  able  to 
five  as  well,  in  most  cases,  as  they  did  before  the  war. 

If  a  man  should  buy  a  tract  of  land  and  then 
instead  of  ploughing  and  sowing  he  should  merely 
sit  on  his  porch  and  contemplate,  he  would  get  scant 
sympathy  if  he  said  that  his  income  from  the  farm 
was  wholly  insufiicient  to  support  Hfe  decently.  Yet 
that  is  exactly  what  millions  of  workers  are  doing 
to-day  and  are  asking  for  Government  aid  because 


COMMON  SENSE  AND  LABOUR        57 

of  the  straits  in  which  they  find  themselves — ^because 
they  will  neither  plough  nor  plant. 

There  are  two  sides  to  this.  Some  workers  are 
willing  to  plough  and  plant,  but  they  think  that  the 
owner  of  the  field  takes  more  than  is  coming  to  him — 
that  is,  the  employer  is  getting  too  much  and  they 
are  getting  too  little.  There  are  employers  just  as 
unintelligent  as  the  workmen,  who  think  that  they, 
too,  can  get  something  for  nothing — that  they  can 
get  production  without  using  brain  power  in  the 
movement  of  their  capital,  in  the  planning  of  the 
work,  and  in  the  adequate  paying  of  their  men. 
Ignorance  is  not  a  class  trait  and,  comparatively 
speaking,  there  are  just  as  many  employers  who  do 
not  know  how  to  do  their  work  as  there  are  workmen 
who  do  not  know  how  to  do  theirs.  That  is  one  of 
the  reasons  that  we  are  having  so  much  trouble 
about  wages. 

Spurred  on  by  the  cost  of  living  and  not  a  little 
convinced  that  maybe  something  after  all  can  really 
be  had  for  nothing,  the  wage  earner  has  taken  the  bit 
into  his  teeth  and  is  off  at  a  gallop.  It  remains  to  be 
seen  whether  he  will  tire  himself  out  before  he  spills 
the  milk  wagon. 

The  trades  unionists,  headed  by  Mr.  Gompers, 


58        COMMON  SENSE  AND  LABOUR 

say,  after  the  manner  of  oracles,  that  wages  must 
stay  up.  A  few  impolitic  owners  say  that  wages 
must  come  down  and  at  once,  but  whenever  an  or- 
ganization attempts  to  reduce  wages  it  has  a  strike. 

The  workers  and  the  employers  alike  talk  about 
wages  as  though  they  were  definite  payments  quite 
detached  from  mundane  affairs  and  as  though  a 
dollar  yesterday  were  the  same  as  a  dollar  to-day 
and  a  dollar  to-morrow — that  there  is  some  particular 
sanctity  attached  to  the  payments  they  made  back, 
say,  in  1913  or  1914.  Both  sides  quite  forget  that, 
since  the  beginning  of  time,  the  average  worker  has 
considered  his  wage  too  low,  and  the  average  em- 
ployer has  considered  that  same  wage  too  high. 
Neither  side  talks  of  production  and  its  relation  to 
wages,  but  they  agree  that  a  dollar  is  a  specific  thing 
and,  for  the  purpose  of  wage  argument,  they  are  very 
apt  to  take  it  as  a  standard  of  fixed  value.  The 
employers  forget  that  the  dollar-a-day  man  disap- 
peared long  before  the  dollar  watch  went  off  the 
market  and  that  we  to-day  are  dealing  in"a  different 
sort  of  a  currency.  A  moving-picture  producer  who 
is  thoroughly  acquainted  with  the  country  said  to 
me  most  significantly  not  long  since: 

"We  used  to  reckon  the  nickel  as  the  multiple 


COMMON  SENSE  AND  LABOUR        59 

of  value  for  admission  but  now  it  is  the  dime.  It  is 
foolish  to  raise  an  admission  fee  only  five  cents. 
We  have  made  many  experiments  and  we  know  that 
the  man  who  formerly  had  a  ten-cent  show  has  just 
as  big  an  audience  if  he  goes  to  twenty  cents  as  if  he 
goes  to  fifteen." 

Whether  wages  will  stay  up  or  come  down  does 
not  depend  upon  the  employers,  or  upon  Mr.  Gomp- 
ers,  or  upon  any  other  man  or  group  in  the  world.  The 
particular  number  of  counters  used  is  not  of  the  slight- 
est importance  anyway.  Wages  are  too  high  when 
they  do  not  give  production.  They  are  too  low  not 
when  they  do  not  support  life,  but  when  the  return 
to  the  employer  is  higher  than  it  should  be.  This  is 
a  very  indefinite  statement,  but  the  whole  matter  of 
wages  is  indefinite  because  it  gets  down  to  particu- 
lar cases,  and  the  balance  between  labour  and  capital 
is  not  a  thing  which  can  be  decided,  except  in  the 
crudest  manner,  by  national  boards,  for  it  is  largely 
a  matter  of  individual  brains.  Nationally  fixed 
wages  promote  sloppy  production  and  inevitably 
raise  prices. 

There  is  no  particular  reason  why  there  should  be 
a  limit  to  wages,  unless  we  are  prepared  to  say  there 
is  a  limit  to  skill  and  intelligence.    Skill  and  intelli- 


y 


60        COMMON  SENSE  AND  LABOUR 

gence  are  as  much  the  business  of  the  employer  as 
they  are  of  the  worker.  When  an  employer  says 
he  cannot  pay  more  than  $5  a  day  in  his  business 
he  really  says  in  effect:  "I  have  reached  my  limit 
of  intelligence  in  the  conduct  of  this  business  and  I 
do  not  know  how  further  to  improve  the  process  of 
fabrication." 

Take  a  case  in  point.  A  factory  making  auto- 
mobile parts  in  Cleveland  was  swamped  with  orders. 
It  had  risen  through  a  somewhat  hazardous  career, 
having  been  originally  financed  on  about  half  a  shoe 
string,  and  like  so  many  firms  connected  with  the 
automobile  industry,  it  went  ahead  faster  than  its 
capital.  It  wanted  to  borrow  money,  but  the 
security  from  the  banking  standpoint  was  none  too 
good  and  the  only  rates  offered  were  exceedingly  high. 
The  workmen  asked  for  higher  wages  but  the  cost 
sheets  showed  that  the  company  could  not  pay 
materially  higher  wages  without  so  increasing  the 
cost  of  the  product  that  it  would  lose  business  to 
competitors. 

In  their  straits  the  company  had  recourse  to  an  in- 
dustrial counsel.  He  discovered  a  number  of  things. 
Among  them  was  that  by  the  bad  arrangement  of  the 
machinery,  stock  room,  and  the  transportation  in- 


COMMON  SENSE  AND  LABOUR        61 

•ide  the  plant,  60  per  cent,  of  the  total  shop  wage* 
was  paid  for  walking  and  not  for  working.  He 
found  that  the  concern  was  carrying  nearly  a  million 
dollars'  worth  of  raw  stock  whereas  it  used  only  about 
$300,000  per  month  and  all  of  the  stock  was  at  that 
time  readily  procurable  from  day  to  day.  He  cut 
down  the  stock,  rearranged  the  factory,  and  ad- 
justed credits  so  as  to  be  able  to  turn  the  capital 
every  sixty  days  instead  of  slightly  more  than  once  a 
year,  with  the  result  that  this  concern  found  that  it 
did  not  need  more  capital  at  all.  It  needed  only 
better  management  and  planning.  The  managers 
arranged  to  pay  the  men  on  performance  and  shortly 
they  were  able,  with  the  former  plant  facilities  and 
without  increasing  the  number  of  men,  to  do  nearly 
double  the  business  which  they  had  previously 
thought  impossible  without  a  large  increase  in  capital. 
The  workers  not  only  earn  large  amounts  but  the 
company  has  greater  profits  than  ever  before. 

If  that  company  had  succeeded  in  borrowing  all 
the  money  it  wanted  it  would  not  have  put  its  house 
in  order,  but  instead  it  would  have  gone  sprawling 
along  wasting  money  in  every  direction  and  trying 
to  pay  a  satisfactory  dividend  on  the  additional 
capital  which  it  did  not  need.    With  all  of  this  man- 


62        COMMON  SENSE  AND  LABOUR 

agement  wastage  added  into  the  price  of  the  product 
it  could  not  adequately  have  paid  the  men. 

The  workers  are  quite  right  when  they  say  that 
capital  which  performs  no  service  in  an  enterprise 
should  not  expect  a  profit  and,  although  the  largest 
dividend  paid  upon  capital  will  seldom  mean  a  con- 
siderable increase  in  wages  if  spread  over  the  dividend 
period,  yet  the  principle  is  entirely  correct  that 
watered  stock  or  idle  capital  should  not  expect  to  re- 
ceive a  dividend.  The  converse  is  equally  true, 
workers  who  insist  that  more  men  than  are  necessary 
be  kept  on  a  job  should  be  prepared  to  pay  the  wages 
of  those  men.  And  men  who  do  not  give  a  return 
are  no  better  than  capital  which  does  not  give  a 
return. 

But  in  many  cases  wage  disputes  do  not  seem  to 
turn  so  much  on  the  gross  wages  paid  as  on  the  rela- 
tion to  what  the  company  itself  is  earning.  A  very 
large  company,  which  is  noted  for  extraordinary 
stupidity  in  treating  with  workers,  not  long  since  an- 
nounced a  cut  in  wages  and  almost  at  the  same  time 
a  special  dividend  to  stock  holders,  and  very  naturally 
and  very  properly  they  immediately  had  a  strike  on 
their  hands.  This  strike  will  cost  them  consider- 
ably more  in  lost  business  and  in  idle  plant  charges 


COMMON  SENSE  AND  LABOUR        63 

than  the  comparatively  small  amomit  of  money 
which  they  expected  to  save  by  cutting  wages.  It 
is  not  so  much  that  workers  object  to  the  reduction 
of  wages  as  they  object  to  being  taken  in,  to  being 
made  the  goats,  so  to  speak,  for  extraordinary  profits. 
Profits  may  not  be  extraordinary  but  if  the  workers 
think  they  are,  it  amounts  to  the  same  thing.  If 
a  thoroughly  representative  body  of  the  workers  is 
supplied  with  all  the  facts,  wage  adjustments  on  a 
fair  basis  can  always  be  arrived  at. 

An  illustration  of  this  is  the  Filene  Store  in  Boston. 
Many  years  ago  E.  A.  Filene  received  a  protest  from 
a  cashier  who,  being  accidentally  short  in  her  ac- 
counts, asserted  that  the  sum  should  not  be  deducted 
from  her  wages  because  when  she  was  over  in  her  ac- 
counts it  was  the  company  and  not  she  who  received 
the  money.  She  thought  mistakes  could  work  both 
ways.  Mr.  Filene  said:  "Let  us  leave  it  to  a  third 
party."  They  did,  and  the  third  person  decided 
against  the  firm,  but  the  idea  gave  such  general  sat- 
isfaction that  out  of  it  grew  a  cooperative  association 
of  the  employees  which  now  to  a  very  large  degree 
helps  in  the  management  of  the  store.  This  coopera- 
tive association  appoints  a  committee  to  audit  the 
finances.    Every  employee  in  that  store  knows  how 


64        COMMON  SENSE  AND  LABOUR 

much  the  company  makes  and  more  or  less  accurately 
the  salary  of  every  executive  officer,  and  although 
they  do  not  fix  their  own  salaries,  yet  through  a  sys- 
tem of  committees  and  arbitration  boards  every 
person  who  believes  that  his  salary  is  not  right  has  an 
opportunity  to  show  why -it  is  not  right.  The  em- 
ployees have  a  flat  wage  and  a  commission  on  all 
sales  made  above  the  point  where  they  have  earned 
their  wages  according  to  the  calculation  of  selling 
expense.  It  is  a  curious  fact  that  the  decisions  of 
the  board  of  arbitration  will  from  year  to  year  aver- 
age about  one  half  in  favour  of  the  company  and  one 
half  in  favour  of  the  employees. 

Or  take  another  case,  which  has  to  deal  with 
"roughnecks,"  with  unskilled  labour,  and  with  the 
olass  of  anarchists  and  I.  W.  W.  who  staged  the 
Seattle  strike.  When  General  Disque  went  into 
Oregon  and  Washington  to  get  out  aeroplane  wood, 
he  was  met  with  labour  conditions  about  as  serious 
as  it  is  possible  to  conceive.  The  employers  were 
mostly  men  who  had  once  been  workers.  They  were 
hard-headed  and  hard-fisted.  They  fought  to  keep 
up  prices  and  to  beat  down  labour.  They  hired  a 
man  when  they  needed  him  and  they  fired  him  the 
moment  his  services  were  unnecessary.    The  labour- 


^i 


COMMON  SENSE  AND  LABOUR        65 

ing  men,  a  large  number  of  whom  were  ignorant  for- 
eigners, retaliated  in  kind.  They  worked  only  when 
they  had  no  money;  they  "struck  on  the  job";  they 
practised  sabotage.  They  delighted  to  leave  in  a 
body  when  the  employer  particularly  needed  their 
services.  Whenever  they  found  their  employers 
rushed  for  production  and  in  pressing  need  of  getting 
out  timber,  they  struck  for  more  money.  General 
Disque  found  that  it  was  the  universal  belief  of  the 
employees  that  the  operators  were  making  enormous 
sums  of  money — that  they  were  gouging  the  Govern- 
ment. The  workers  felt  that  it  was  only  right  and 
just  that  they  should  in  turn  gouge  the  employers. 

General  Disque  organized  the  Loyal  Legion  of 
Loggers  and  Lumbermen  on  a  quasi-patriotic  basis, 
but  almost  his  first  act  was  to  require  a  comprehen- 
sive audit  to  be  made  at  each  camp,  showing  the  ex- 
act cost  of  getting  out  the  wood  and  how  much  the 
operators  were  making.  These  he  laid  before  com- 
mittees of  each  camp  and  the  wage  troubles  ceased. 

Having  all  the  facts,  there  was  no  difficulty  at  all 
about  arranging  a  satisfactory  scale  of  wages  and  an 
eight-hour  day.  They  started  in  to  make  the  camps 
livable — which  they  had  not  been  before — the  work- 
ers stopped  travelling  from  camp  to  camp,  and  the 


66        COIMMON  SENSE  AND  LABOUR 

labour  turnover,  which  had  been  1,000  per  cent,  a 
year,  dropped  to  nothing.  What  that  means  is  pos- 
sibly more  easily  comprehended  from  the  fact  that, 
before  the  Legion  came  into  being,  the  employment 
agencies  in  Spokane  found  jobs  for  8,000  men  a 
month  while  only  about  12,000  were  employed  in  that 
district. 

The  Legion  performed  a  splendid  service  during 
the  war,  but  from  an  employment  standpoint  their 
most  remarkable  achievements  have  been  since  the 
Armistice.  They  then  adopted  two  very  notable 
policies,  especially  notable  in  view  of  the  general 
attitude  of  employers  and  employees  everywhere. 
Let  me  give  them  in  the  words  of  General  Disque: 

It  was  agreed  that  wages  are  not  represented  by  dollars  but 
by  purchasing  power  and  that  as  the  purchasing  power  of  the 
dollar  increased,  the  wages  and  the  employers'  profits  would  de- 
crease in  order  to  promote  the  public  buying  of  lumber.  Several 
wage  reductions  took  place  after  consultation  and  agreement  and 
were  accepted  everywhere  as  fair.  Since  then  the  demand  and 
the  price  of  lumber  have  risen  and  with  them  the  wages,  by  agree- 
ment, have  increased. 

That  a  man  shall  not  be  discharged  without  cause  and  that  it 
is  to  the  advantage  of  the  employer  to  provide  continuous  em- 
ployment as  far  as  his  business  will  permit.  It  is  recognized 
that  during  the  season  when  lumber  cannot  be  cut,  wages  will 
not  be  so  high  as  in  the  active  times,  but  that  jobs  can  be  found 
in  and  about  the  camp  in  repair  and  construction  work. 


COMMON  SENSE  AND  LABOUR        67 

Take  another  case.  Up  at  Bantam,  Connecticut, 
is  a  machine  plant  employing  about  one  hundred  men. 
These  men  hold  a  mass  meeting  once  a  month  to 
talk  over  business  affairs,  to  hear  complaints  if  there 
are  any,  and  more  especially,  constructively  to  discuss 
the  advancement  of  the  business.  A  small  percent- 
age of  these  men  are  American  born,  nearly  all  of 
them  came  into  the  plant  as  unskilled  labourers. 
They  gained  their  training  within  this  place.  They 
have  committees  to  attend  to  various  details,  but 
the  working  body  being  small,  they  transact  most 
of  their  business  at  mass  meetings. 

That  plant  is  in  the  war  zone  only  thirty  miles  from 
Bridgeport,  and  at  times  during  the  war  Bridgeport 
was  offering  three  times  the  wages  which  were  being 
paid  at  the  smaller  plant,  but  during  that  time  only 
two  men  left  for  the  high  wages  and  after  a  few  weeks 
both  of  them  came  back.  Long  before  the  Armistice 
the  meetings  began  to  discuss  what  they  were  going 
to  do  when  peace  came.  Their  wages  had  been  in- 
creased, they  knew  exactly  what  the  company  was 
doing,  what  the  company  was  making,  and  prac- 
tically what  each  executive  was  drawing  in  the  way 
of  salary.  Over  and  above  their  wages  they  receive 
a  dividend  on  the  gross  factory  production  on  the 


68        COMMON  SENSE  AND  LABOUR 

theory  that  if  the  factory  turns  out  the  proper 
amount  of  goods,  it  is  up  to  the  management  to  make 
the  sales.  They  agreed  among  themselves  that  the 
big  thing  was  to  keep  going  after  the  Armistice  and 
that,  if  it  were  necessary,  they  would  reduce  their 
wages  and  go  upon  shorter  time. 

The  salesmen  of  the  company  also  attended  those 
meetings  and  those  salesmen  went  out  and  secured 
sufficient  orders  for  advance  work  for  dehvery  after 
peace — the  company  was  100  per  cent,  on  war  work 
— and  where  many  companies  were  demanding  that 
the  Government  pay  money  for  the  cancellation  of 
their  contracts,  this  company  on  the  day  of  the  Ar- 
mistice wired  Washington  for  permission  to  cancel  its 
contracts  and  within  two  days  was  going  ahead  full 
time  on  peace  work!  The  only  reason  for  the  delay 
of  two  days  was  that  most  of  the  workers  partici- 
pated in  everj'^  parade  within  a  radius  of  twenty  miles. 

That  plant  has  not  found  it  necessary  to  reduce 
wages.  Other  employers  in  that  same  valley,  whose 
people  do  not  help  them  manage,  have  reduced  wages 
and  have  been  most  of  the  time  tied  up  with  serious 
strikes. 

Take  another  case.  Out  in  Fort  Wayne,  Indiana, 
is  a  piano  factory  which  is  organized  as  a  kind  of 


COMMON  SENSE  AND  LABOUR        69 

industrial  democracy.  The  executives  of  the  com- 
pany form  a  cabinet;  the  superintendents  and  fore- 
men meet  in  a  body,  which  is  called  the  Senate;  while 
the  workmen  elect  by  secret  ballot  to  the  House  of 
Representatives.  These  three  bodies  legislate  for 
the  plant.  These  men  in  1914,  during  the  depression, 
by  their  own  action  reduced  their  wages  and  went  on 
part  time.  There  were  then  265  of  them  and  grad- 
ually economic  reasons  caused  their  number  to 
dwindle  until  only  168  were  left.  These  remaining 
men  devised  so  many  new  methods  and  so  many  new 
machines  that  later,  when  times  picked  up,  and 
finally  when  the  boom  began,  they  were  able  without 
increasing  their  number  to  double  what  was  sup- 
posed to  be  the  former  capacity  of  the  plant.  There 
has  been  no  wage  trouble.  Their  productivity  and 
ingenuity  have  made  them  masters  of  their  craft,  and 
it  is  profitable  for  the  company  to  pay  them  double 
what  men  in  similar  fines  receive.  In  more  than  one 
case,  after  having  devised  a  better  method,  the  men 
have  voluntarily  rearranged  their  piece  rates  because 
with  their  new  methods  the  old  rate  produced  an  in- 
come which  they  felt  was  disproportionate  to  the  job. 
In  addition  to  their  rates  and  wages  each  employee 
shares  in  what  is  known  as  an  "economy  dividend'* 


\ 


70        COIVIMON  SENSE  AND  LABOUR 

— the  relative  savings  in  production  costs  are  divided 
fifty-fifty  between  the  company  and  the  men. 

What  is  a  job  worth?  The  average  manufacturer 
will  tell  you  that  he  cannot  pay  above  the  market 
rate,  whatever  that  may  be,  and  he  will  view  dollars 
of  wages  exactly  as  a  workman  views  them — that 
is,  without  any  relation  to  what  the  one  is  going  to 
get,  or  the  other  to  give,  in  return  for  the  money.  A 
certain  trade  can  pay  so  much  and  it  cannot  pay 
more,  that  is  settled.  The  wage  is  high  or  low  ac- 
cording to  the  number  of  dollars  it  contains,  regard- 
less of  production — that  is,  regardless  of  return  per 
dollar  of  wages.  Because  a  man  who  formerly  got 
$18  a  week  now  finds  $25  or  $30  in  his  envelope  he 
is  convinced  that  he  is  receiving  fairly  high  wages, 
while  the  employer  is  quite  certain  that  he  is  paying 
high  wages.  One  hears  everywhere  the  complaint  that 
the  price  of  an  article  is  so  high  because  of  the  wages 
which  must  be  paid.  Somehow  or  other  every  discus- 
sion of  employment  troubles  eventually  gets  around 
to  wages.  Now  just  what  have  wages  to  do  with 
w^hat  is  called  "  labour  disorder"  ? — when  are  they  high 
and  when  are  they  low? — and  is  there  any  particular 
reason  that  wages  should  be  lowered  or  be  raised? 

Wages  have  this  much  to  do  with  labour  trouble 


fwkif" 


COJNIMON  SENSE  AND  LABOUR        71 

and  no  more:  if  the  wage  which  a  man  receives  for  a 
day's  work  is  not  sufficient  to  support  him  and  leave 
even  a  moderate  amount  for  pleasure,  the  wage  is 
indeed  too  low;  if  the  wage  does  not  increase  witli  the 
intelhgence  and  production  of  the  man,  if  it  is  pos- 
sible for  him  to  look  ahead  and  see  an  absolute  bar 
beyond  which  he  cannot  go,  then  something  is  the 
matter  with  the  wage.  High  wages  do  not  mean 
contentment,  and  if  employment  is  arranged  solely 
on  the  basis  of  wages,  the  men  will  neither  give  good 
service  nor  stay  on  their  jobs.  During  the  war  it 
was  the  highest-  and  not  the  lowest-wage  concerns 
which  had  the  greatest  turnover  of  labour. 

Turnover  of  laboiu*  is  the  number  of  men  who  must 
be  employed  each  year  to  retaui  an  average  force,  and 
during  the  war,  in  some  very  high- wage  estabhshments, 
twenty-five  thousand  men  were  employed  duriug  the 
year  to  retain  an  average  force  of  five  thousand. 

Wages  are  high  when  they  do  not  result  in  produc- 
tion; they  are  low — ^no  matter  how  many  dollars  are 
contaiued  in  them — if  they  give  production.  The 
union  between  wages  and  production  is  inseparable, 
but  it  is  neglected  by  nearly  all  employers  and  by 
most  employees.  There  is  somehow  an  idea,  regard- 
less of  all  the  facts,  that  a  particular  job  is  worth 


7«        COMMON  SENSE  AND  LABOUR 

just  so  much  and  no  more.  Hence  we  have  what  is 
called  the  market  rate  which  in  turn  varies  according 
to  the  demand,  as  compared  with  the  supply  of  labour. 

But  the  best  employers  of  the  country  have  long 
since  given  up  any  idea  that  there  is  such  a  thing  as  a 
market  rate  for  labour.  There  is  no  market  rate  for 
professional  men  above  a  certain  grade,  there  is  no 
market  rate  for  surgical  operations,  or  for  good  por- 
trait painting.  In  fact,  we  find  the  market  rate  only 
in  mediocrity;  and  that  is  what  farseeing  employers 
have  discovered  and,  by  lifting  themselves  out  of 
mediocrity,  have  found  it  unnecessary  even  to  inquire 
what  the  market  rate  is. 

The  market  rate  does  not  amount  to  much  in  mer- 
chandising. If  an  article  is  thoroughly  good  it  is 
bought  eagerly  regardless  of  the  price,  because  it 
gives  service.  And  that  is  just  the  way  some  em- 
ployers have  regarded  the  value  of  the  service  of  those 
whom  they  hire;  instead  of  looking  at  wages  as  so 
much  paid  out,  they  have  looked  at  them  in  the 
longer  way  of  service  purchased,  and  they  have  found 
that  for  $2  rightly  paid  they  can  purchase  more  than 
twice  as  much  service  as  for  $1. 

There  are  many  ways  of  paying  wages  and  there  is 
no  rule  at  all  involved,  there  is  no  best  way — the 


COIVIMON  SENSE  AND  LABOUR        73 

best  way  is  that  which  suits  the  circumstance.  In 
many  places  what  are  called  "piece  rates"  obtain; 
that  is,  a  man  is  paid  for  the  number  of  articles  or 
operations  which  he  completes  during  the  day. 
Piece  rates  are  generally  unsatisfactory,  because  it  is 
a  very  difficult  matter  properly  to  i^x  the  rates.  A 
very  common  loose  method  is  this:  suppose  a  group 
of  girls  has  been  working  on  a  certain  article  for  some 
time.  The  superintendent  drops  in,  chats  with  the 
foreman,  and  then  asks  why  those  girls  shouldn't 
go  on  piece  rates. 

"What  will  the  best  of  them  do  a  day?"  he  queries. 

"Well,  the  fat  girl  will  do  about  200  and  the  big 
Swede  about  210." 

"Then  if  we  make  the  day's  quota  225  they  will 
all  have  to  hustle  to  get  the  money  they  are  getting 
now.?" 

"You  bet  they  will,"  responds  the  foreman,  "and  it 
will  do  them  good." 

And  on  that  basis  the  rate  is  fixed  with  the  idea 
in  mind  that  an  economy  has  been  accomplished, 
when,  as  a  matter  of  fact,  the  only  accomplishment 
has  been  in  the  way  of  creating  a  certain  amount  of 
resentment  and  dissatisfaction,  which  means  that  the 
goods  will  suffer. 


74        C0M3I0N  SENSE  AND  LABOUR 

There  is  a  scientific  method  of  fixing  piece  rates 
by  means  of  the  stop-watch,  and  the  use  of  the  stop- 
watch in  industry  is  a  whole  subject  in  itself.  It  is 
objected  to  generally  by  workers  because  it  has  been 
used  as  a  basis  for  inhuman  forcing  by  uninteUigent 
eflBciency  engineers.  So  great  is  the  resentment 
against  stop-watches  and  efficiency  that  the  mere 
mention  of  them  will  often  send  a  whole  factory  out 
on  a  rampage.  In  the  right  use  of  the  stop-watch 
each  motion  is  timed,  the  motions  are  studied,  and 
it  is  sought  to  ehminate  every  unnecessary  motion. 
The  trainer  of  a  track  team  watches  his  sprinters 
closely  to  see  that  they  do  not  throw  away  any  exer- 
tion but  put  every  ounce  into  going  forward.  The 
late  Mike  Murphy  could  add  seconds  to  a  runner 
simply  by  taking  away  from  him  the  motions  which 
amoimted  to  nothing  more  than  pawing  into  the  air. 
The  stop-watch  finds  out  by  a  study  of  the  various 
movements — and  this  is  a  long  and  elaborate  process 
— ^just  how  long  it  should  take  a  man  to  perform  a 
certain  operation;  then  it  adds  periods  for  rest,  and 
sets  a  standard  of  about  60  per  cent,  of  the  ideal 
performance.  If  the  piece  rate  is  fixed  on  this  stan- 
dard, then  a  man  will  earn  an  ordinary  day's  wages 
if  he  performs  to  the  standard;  when  he  goes  over  the 


COMMON  SENSE  AND  LABOUR        75 

standard  he  is  paid  an  additional  sum  which  gives 
him  more  than  the  market  rate  for  wages.  The 
reason  that  efficiency  has  fallen  into  such  disrepute 
is  that  charlatans  sometimes  fix  standards  without 
knowing  how  to  arrive  at  those  standards,  and  make 
the  standards  so  high  that  the  man,  improperly  in- 
structed in  his  motions,  has  simply  to  wear  himself 
out  in  order  to  make  even  a  good  day's  pay. 

A  man  can  always  do  a  job  better  if  he  has  proper 
instruction — that  is  axiomatic.  An  amateur  base- 
ball pitcher,  aspiring  to  become  a  professional,  will 
hang  aroimd  a  well-known  professional  all  day  long  in 
the  hope  of  picking  up  some  better  way  of  pitching. 
But  it  is  more  or  less  the  fashion  among  workers  to 
resent  the  idea  that  they,  too,  might  learn  from  a 
coach;  and  in  this  they  are  for  the  moment  at  one 
with  a  considerable  number  of  employers  who  insist 
that  whatever  way  a  thing  has  previously  been  done 
is  undoubtedly  the  best  way — and  they  will  not 
change.  The  employee  who  refuses  to  learn  new  and 
better  ways  to  do  his  work  has  his  complement  in 
the  employer  who  will  not  change  methods.  It  is 
not  at  all  curious  or  remarkable  that  the  most  con- 
siderable wage  disputes  usually  occur  in  the  most 
backward  estabhshments. 


76        COMMON  SENSE  AND  LABOUR 

The  objection  of  intelligent  workmen  to  better 
methods  is  that,  when  they  do  give  service  and  moke 
money,  they  immediately  find  that  their  rates  are  cut 
to  such  a  point  that  their  additional  service  results 
in  no  greater  financial  return  to  them  than  the  previ- 
ous poor  service.  In  this,  in  many  instances,  they 
are  perfectly  correct,  for  the  short-sighted  employer 
does  immediately  cut  down  when  he  thinks  a  group 
of  men  are  "making  all  they  ought  to  make." 

From  the  experience  of  many  able  men  this  can 
be  deduced  in  regard  to  wages:  "A  wage  is  never  of 
itself  high  or  low,  but  the  amount  is  relative  and  its 
righteousness  depends  upon  the  coordination  of  the 
respective  skill  of  both  capital  and  labour.  It  is 
not  a  fixed  but  a  shifting  payment,  depending  upon 
and  adjusted  to  performance,  and  that  adjustment 
is  best  made  by  frequent  conference  between  the 
employer  and  the  employed." 

But  recently  no  fixed  wage  has  been  of  itself  satis- 
factory and  there  have  been  devised  methods,  some 
good  and  some  bad,  further  to  compensate  according 
to  mass  performance  and  to  estabHsh  a  reason  for 
working  with  the  company. 

The  wage  is  the  measiu-e  of  the  worker's  contribu- 
tion— ^how  is  it  to  be  measured? 


CHAPTER  FOUR 

WAGES  AND  PROFIT-SHARING  DELUSIONS 

A  LIGHTNING  joumey  to  unpopularity  might  be 
made  by  that  pubHc  officer  who  would  announce: 
"If  the  employers  and  the  employees  were  to  stop 
talking  about  profits  and  wages  for  a  while  and  talk 
instead  about  work,  it  would  not  be  long  before  prof- 
its and  wages  would  take  care  of  themselves." 

We  have  all  talked  ourselves  into  the  notion  that 
the  war  has  changed  humanity,  that  all  the  old  rela- 
tions have  shamefacedly  backed  out,  and  that  work 
and  wages  are  something  very  different  from  what 
they  used  to  be.  We  talk  about  the  dignity  of  the 
worker  and  all  that,  but  seldom  about  the  dignity 
of  the  work.  We  try  to  express  dignity  in  money 
terms  instead  of  in  work  terms  and — we  get  nowhere. 
We  have  talked  so  volubly  of  reconstruction,  but  we 
have  forgotten  what  it  is  we  were  going  to  recon- 
struct. The  extraordinary  fact  stands  out  that  the 
three  large  concerns  in  this  country  which  might 
be  said  jointly  to  hold  the  long-distance  record  for 
industrial  peace  are,  judged  by  the  standards  of  to- 

77 


78        COMMON  SENSE  AND  LABOUR 

day,  utterly  unscientific  in  that  they  have  no  labour 
methods  at  all,  and  they  strikingly  violate  the  dictum 
that  the  relation  between  employer  and  employee 
needs  quick  surgical  attention. 

The  Baldwin  Locomotive  Works  is  94  years  old 
and  employs  about  17,000;  the  Disston  Saw  Works 
is  79  years  old  and  employs  about  4,000;  the  Endicott- 
Johnson  Company  is  30  years  old  and  sometimes 
has  as  many  as  19,000.  None  of  them  has  ever  had  a 
strike  or  even  a  serious  wage  dispute.  (A  few  men 
went  out  from  Baldwin's  during  a  car  strike  some 
years  ago  but  it  was  not  a  real  strike.)  The 
heads  and  the  workers  together  devote  themselves 
exclusively  to  work.  The  wages  seem  pretty  well 
able  to  care  for  themselves.  They  have  had,  of 
course,  differences  concerning  wages,  but  adjustments 
have  always  been  quickly  arrived  at.  And  here  is 
another  fact  to  bear  in  mind:  these  employers  have 
been  more  interested  in  the  work  than  in  the  stock 
market — in  the  product  than  in  its  price. 

The  reason  is  not  hard  to  find.  Back  of  every 
wage  dispute,  back  of  every  labour  difficulty,  Ues 
some  kind  of  a  suppression  or  a  distortion  of  the  crea- 
tive instinct.  The  animating  force  of  man  is  the 
creative  instinct;  he  find  his  happiness  in  creating. 


COMMON  SENSE  AND  LABOUR        79 

A  real  leader  of  industry  seldom  finds  any  particular 
pleasure  in  the  money  he  earns.  A  very  few  years 
of  success  will  give  him  more  money  than  he  can 
possibly  spend,  and  from  then  on  the  money  earned 
is  only  the  score  of  the  game.  The  real  fun  is  in  doing 
things.  The  workman  who  is  creating  something 
never  bothers  about  wages  or  hours,  because  his 
chief  fun  is  in  doing.  But  you  cannot  have  the  crea- 
tive expression  in  the  shop  if  you  do  not  have  it  in 
the  office.  The  president  who  thinks  that  his  com- 
pany exists  mainly  to  supply  stock  quotations  is  in 
exactly  the  same  case  with  the  workman  who  looks 
at  his  day's  work  not  as  a  means  of  doing  something, 
but  as  a  means  of  getting  money  without  exertion. 

Look  at  the  progress  of  these  three  record  holders. 
The  Baldwin  Locomotive  Works  is  something  more 
than  a  locomotive  building  plant — it  is  an  institution. 
For  some  time  past  Samuel  M.  Vauclain  has  been  its 
president,  but  for  twenty  years  he  has  been  the  domi- 
nating figure.  Mr.  Vauclain  worked  his  way  up 
from  an  apprentice  in  the  Altoona  shops  of  the  Penn- 
sylvania Railroad.  His  principal  joy  in  living  is  to 
build  locomotives.  He  reaches  his  office  somewhere 
around  seven  in  the  morning  and  leaves  between  six 
and  seven  in  the  evening,  although  sometimes  he  will 


80        COIMIVION  SENSE  AND  LABOUR 

work  eighteen  or  twenty  hours  at  a  stretch.  He  has 
never  taken  a  vacation,  because  he  never  could  find 
anything  to  do  that  would  give  him  as  much  fun  as 
building  locomotives.  He  has  never  bothered  with 
personal  finance,  and  he  further  told  me  that  he  had 
not  for  fifteen  years  known  what  his  own  salary  was — 
he  said  that  he  did  not  have  time  to  bother  with 
money  and  simply  had  the  company  pay  his  salary 
to  a  trust  company.  He  knew  the  amount  could  not 
help  being  enough  because  he  was  doing  his  work  and 
therefore  it  was  of  no  particular  use  to  bother  about 
it.  He  is  a  locomotive  builder.  He  will  not  build 
a  bad  locomotive  at  any  price.  A  locomotive  leav- 
ing those  great  shops  is  regarded  as  tenderly  and  with 
exactly  the  same  spirit  as  a  sculptor  regards  a  finished 
statue  going  out  of  the  studio  for  its  eventual  pedestal. 
The  tradition  of  the  company  is:  Good  work.  Every 
man  in  that  place  from  draughtsman  to  the  lowest 
grade  of  mechanic  knows  that  Mr.  Vauclain  is  a  loco- 
motive expert  from  any  angle  and  could  turn  to  any 
job  in  the  shop  and  do  it  better  than  the  man  who  is 
doing  it.  The  people  regard  him  just  as  art  students 
regard  the  master  who  drops  in  to  criticize.  They 
know  that  he  has  done  everything  which  they  are 
doing  and  has  done  it  better  than  they  are  now  doing 


COMMON  SENSE  AND  LABOUR        81 

it.  He  is  their  natural  leader.  They  honour  him 
as  such.  Taking  his  personal  example  they  resent 
bad  work  as  bitterly  as  he  would  resent  it.  They 
are  satisfied  that  if  they  work  well  they  will  be  well 
paid,  and  they  always  are.  They  do  not  work  for 
wages — they  create  locomotives. 

Henry  Disston  and  Sons,  another  Philadelphia 
institution,  was  founded  by  Henry  Disston,  an  expert 
saw  maker.  In  1840,  when  he  began  in  a  cellar  shop, 
all  the  saws  were  imported  from  England.  He  made 
his  saws  and  then  peddled  them.  He  sold  the  best 
saw  that  he  knew  how  to  make  and  sold  it  as  the  best 
saw  which  could  be  made — regardless  of  the  price 
of  any  saw.  The  cellar  shop  grew  into  a  factory  and 
the  factory  into  a  great  plant  covering  many  acres. 
Henry  Disston  died  a  wealthy  man,  but  always  he 
was  first  a  saw  maker.  His  sons  followed  him  into 
the  factory;  they  became  expert  saw  makers  before 
they  became  executives,  and  they  became  expert  by 
working  side  by  side  with  the  men  at  the  benches 
for  from  five  to  fifteen  years.  The  second  and  the 
third  generations  of  the  family  have  in  turn  gone  into 
the  shops;  it  is  a  tradition  of  the  family  and  of  the 
shop  that  the  Disston  boys  shall  serve  their  time  on 
exactly  the  same  conditions  as  any  other  apprentices. 


82        COMMON  SENSE  AND  LABOUR 

To-day  the  saws  go  all  over  the  world  and  each  saw 
goes  out  as  a  product  of  craftsmanship  rather  than  as 
a  saw.  The  executives  and  the  employees  are  fellow 
craftsmen;  the  older  workers  have  worked  with  the 
fathers  of  the  present  executives  as  well  as  with  the 
executives  themselves;  the  apprentices  of  to-day  who 
will  be  the  workers  of  to-morrow  are  working  on  a 
level  plane  with  the  executives  of  to-morrow.  The 
old  workers  send  their  sons  to  Disston's  to  become 
apprentices  in  the  same  matter-of-course  way  that 
the  owners  send  in  their  sons.  An  employee  of  the 
saw  works  is  regarded  as  a  man  of  substance  in  the 
community — he  is  of  the  aristocracy  of  workers. 
And  he  did  not  gain  that  position  by  talking  about 
the  dignity  of  labour;  he  got  it  by  making  good  saws; 
the  dignity  followed  as  day  follows  night.  You 
will  find  three  generations  of  workers  together  in  the 
same  shop;  you  will  find  three  generations  of  Disstons 
in  the  management.  The  names  of  the  men  who 
fell  in  the  Great  War  hang  on  the  same  wall  with  the 
names  of  those  who  fell  in  the  Civil  War.  When  the 
Rebellion  broke  out,  Henry  Disston  called  the  shop 
together  to  say  that  he  would  care  for  the  families  of 
those  who  wanted  to  fight  and  that  the  old  jobs  would 
be  waiting  when  they  got  back.     They  organized 


COMMON  SENSE  AND  LABOUR        83 

a  full  company — every  man  of  service  age  went. 
The  present  executives  did  exactly  the  same  thing 
when  we  declared  war  with  Germany  and  they  did  it 
as  a  matter  of  course.  The  traditions  go  far  back; 
they  are  founded  on  the  single  principle  of  good  work; 
every  other  detail  has  cared  for  itself.  The  Disstons 
do  not  know  what  a  labour  problem  is. 

The  Endicott-Johnson  Company  is,  first,  the  guar- 
dian of  a  community  making  shoes,  and,  secondly, 
a  company.  George  F.  Johnson  began  as  shoemaker 
and  he  is  one  to-day.  He,  too,  believes  in  the  dignity 
of  labour — ^not  in  the  phrase  but  in  the  fact,  and  he 
puts  the  idea  into  practice.  Here  is  his  creed  in  his 
own  words: 

It  is  my  opinion  that  "Wages"  is  not  the  answer  to  labour's 
unrest.  It  is  my  opinion,  also,  that  "Hours,"  and  even  "Work- 
ing Conditions,"  is  not  the  answer. 

I  haven't  seen  any  plan  of  representation  on  Boards  of  Control 
by  the  workers  which  seems  to  me  as  good  and  effective  as  our 
plan,  which  prevailed  when  the  "boss"  worked  and  lived  with 
the  workmen,  when  the  workmen  and  the  "boss"  went  to  dinner 
together,  played  together;  in  fact,  a  return  to  that  simple  demo- 
cratic idea  that  the  "boss"  and  the  workers  are  not  particularly 
different;  if  anything,  the  workers  had  the  best  end  of  it;  the 
"boss"  had  to  do  all  the  worrying,  find  the  money,  and  work  a 
little  harder  than  anybody  else. 

This  means  that,  in  our  industry,  those  who  control,  work  with, 
live  with,  and  play  with  the  working  people,  and  this  means  the 


84        COMMON  SENSE  AND  LABOUR 

families  of  those  in  control;  the  children  play  and  go  to  school 
together. 

We  are  trying  to  get  our  working  people  to  feel  that  this  is 
their  business  just  as  much  as  ours,  and  that  they  must,  them- 
selves, protect  the  business :  that  they  must  feel  that  it  is  just  as 
much  their  business  as  ours  to  see  that  no  "dead-heads,"  "dead- 
beats,"  or  "time-killers"  stay  in.  We  want,  in  other  words, 
our  people  to  protect  themselves  by  protecting  the  business. 

We  are  working  out  a  scheme,  which  must  of  course  be  gradual 
and  take  a  lot  of  time,  to  this  end.  We  believe  the  day  is  coming 
when  the  workmen  themselves  (this  includes  the  workwomen,) 
will  not  permit  us  to  put  a  poor,  inefficient,  indifferent  worker  into 
our  business;  they  wiU  help  us  to  get  good,  faithful,  loyal  workers 
into  our  business;  they  will  work  together  to  make  a  success, 
and  as  great  a  success  as  possible. 

The  natural  "Labour  Leader"  is  the  employer.  If  he  fails 
to  recognize  this  fact,  and  if  he  cannot  impress  it  upon  the  minds 
of  his  working  people  that  this  is  a  fact,  they  will  secure  "leaders'* 
of  another  sort  and  kind — self-elected  and  self-appointed,  rank 
outsiders  who  could  not  possibly  be  well  enough  acquainted  with 
the  industrial  arrangement  of  a  large  industry  to  be  able  to 
"lead"  wisely,  even  though  they  were  perfectly  honest  and 
sincere;  hence,  we  should  say  the  safety  of  industry  in  the  future 
lies  in  a  closer  relationship  between  those  who  direct  and  those 
who  do  their  work. 

Ai;id  Mr.  Johnson's  company  is  the  only  large  shoe 
concern  in  the  country  which  has  never  had  a  strike ! 

Do  these  examples  prove  anything  more  than  that 
strong  traditions  and  natural  leaders  develop  a  type 
of  royalist  mind  that  spurns  modernist  thought? 
\Miat  lessons  of  general  apphcation  do  they  hold.^ 


COMMON  SENSE  AND  LABOUR        85 

The  dominating  thought  in  each  of  these  three 
companies  is  the  product — craftsmanship.  They 
prove  that  good  work  well  done  finds  its  proper  pecu- 
niary reward  and,  that  if  all  is  concentrated  on  the 
work,  the  amount  of  wage  will  never  come  into 
dispute.  The  cases  are  extreme,  the  situations  are 
such  as  could  hardly  be  duplicated  by  the  ordinary 
owner,  but  this  much  can  be  duplicated — the  mutual 
emphasis  can  be  put  upon  the  work,  and  the  discussion 
of  wage  may  be  in  terms  of  work  and  skill  instead 
of  only  in  dollars.  That  real  work  is  always  rewarded 
is  no  mere  copy-book  maxim.  It  is  an  economic 
fact  never  to  be  forgotten  in  the  discussion  of  wages. 
The  wage  adjusts  itself  to  the  work  if  the  emphasis 
is  always  on  the  work  and  not  on  the  wage — on  the 
creation  and  not  on  the  remuneration.  And  there 
you  have  the  key  to  wages;  every  scheme  of  employer- 
employee  management  which  can  be  said  to  be  suc- 
cessful will  be  found  to  be  based  upon  good  work 
well  done  and  upon  nothing  else.  Work  is  the  meas- 
ure of  wages. 

A  wage  always  is  unsatisfactory  when  the  work 
and  the  wage  are  not  balanced.  If  too  much  work 
is  given  for  the  wage  then  the  gap  between  the  wage 
earner  and  the  wage  payer  rapidly  widens,  the  first 


86        COIVUVION  SENSE  AND  LABOUR 

going  down  and  the  second  going  up,  and  the  resulting 
situation  is  deplorable.  But  if  too  Httle  work  is 
given  for  the  wages — and  this  is  what  most  people  do 
not  realize — we  have  high  wages  and  small  produc- 
tion, which  means  that  the  wages  do  not  buy  any- 
thing to  speak  of. 

The  doctrine  of  work  is  impopular.  The  capitalist 
would  undoubtedly  like  to  sit  back  and  see  profits 
roll  in  without  any  mental  exertion  on  his  part.  The 
labouring  man  would  like  to  doze  imder  a  tropical 
tree  and  have  his  living  drop  like  fruit  about  him. 
Thus  baldly  stated,  the  situation  is  really  ridiculous, 
and  as  ridiculous  it  would  be  regarded,  were  it  not 
that  these  respective  situations  have  been  all  dressed 
up  in  words  and  phrases,  so  that  unless  the  wanderer 
in  the  intellect  of  industry  is  imcommonly  wary,  he 
will  find  himself  getting  away  from  the  main  point 
and  giving  attention  to  some  side  issue. 

Look  at  a  few  of  these  purely  side  issues  which  can 
be  discussed  limitlessly  without  getting  anywhere. 
In  fact,  there  is  a  school,  learned  of  phrase  and  stately 
of  mien,  which  would  solve  all  things  by  further 
discussion. 

Take  collective  bargaining.  The  very  word  "bar- 
gain" connotes  a  purchase  and  a  sale,  but  the  dis- 


COMMON  SENSE  AND  LABOUR        87 

cussions  on  the  subject  rarely  touch  the  point  of 
what  is  being  sold.  And  yet  how  can  one  either  sell 
or  buy  an  indefinite  thing? 

Take  union  recognition.  Is  that  recognition  asked 
to  the  end  that  incompetent  workers  be  kept  out  of 
shops  and  therefore  the  average  productivity  raised? 
Or  is  it  a  device  to  relieve  union  oflScers  of  the  bother 
of  coUectmg  dues?  In  the  "closed  shop"  the  man 
who  falls  behind  in  his  dues  loses  both  his  card  and  his 
job,  and  the  collection  of  dues  is  therefore  immensely 
simplified. 

Or  take  the  eight-hour  day  with  its  fetching  slogan 
of  "eight  hours  for  work,  eight  hours  for  play,  and 
eight  hours  for  sleep.'*  How  often  is  the  cut  in  the 
day  really  advocated  in  order  to  give  the  worker  more 
leisure?  The  eight-hour  day  to  date  is  merely  a 
method  of  increasing  wages — that  is,  a  man  works 
eight  hours  for  the  same  wages  he  was  getting  for  ten 
hours  and  then  asks  time  and  a  half  for  the  additional 
two  hours.  The  idea  of  doing  as  much  in  eight 
hours  as  in  ten  hours,  which  would  be  a  justification 
of  the  movement,  is  only  mentioned  in  a  more  or  less 
academic  way,  excepting  by  the  man  who  is  paying 
the  wages. 

The  popular  appeal  is  always  to  the  desire  to  get 


88        COMMON  SENSE  AND  LABOUR 

something  for  nothing.  The  objection  among  fair- 
minded  employers  to  unions  as  such  rarely  originates 
in  a  dislike  for  organization  among  employees.  It 
arises  because  the  purpose  of  the  union  organization  is 
seldom  to  discover  ways  and  means  to  increase  wages 
by  increasing  efficiency  of  production,  but  usually  to 
increase  wages  by  decreasing  the  efficiency  of  pro- 
duction. The  unions  have  been  forced  to  be  destruc- 
tive because  they  have  had  to  fight  employers.  The 
very  moment  that  union  leaders  become  constructive 
and  tell  their  people  that  work  is  a  necessity  they 
either  lose  their  jobs  or  lose  their  members.  The 
EngHsh  imion  leaders,  after  years  of  steadily  preach- 
ing that  wages  have  nothing  at  all  to  do  with  work, 
now  suddenly  find  that  unless  they  change  their 
teachings,  there  will  be  no  work  in  England.  The 
more  fearless  of  them,  such  as  J.  C.  Clynes,  are  sug- 
gesting that  the  people  work.  TMiat  is  the  result.'^ 
The  craft  unions  are  losing  membership  and  the 
"All  Workers'  Union"  is  gaining  membership.  The 
proletarian  arguments  which  are  attracting  members 
are  simply  the  old  union  arguments  with  a  ruffle  or 
two  added  to  the  effect  that  if  only  you  organize 
tightly  enough,  you  never  will  have  to  work. 

The  American  worker  has  been  convinced  for  the. 


COMMON  SENSE  AND  LABOUR        89 

moment  that  he  can  get  wages  or  profits  without  work. 
With  few  exceptions,  the  American  worker  of  to-day 
is  not  producing  as  much  in  eight  hours  as  he  did  in 
four  before  the  war.  The  percentage  varies,  but  gen- 
erally speaking  the  efficiency  is  just  about  one  haK. 
A  man  who  made  eight  articles,  in  1914,  will  in  the 
same  time  make  four  of  them  to-day,  and  the  deplor- 
able part  of  the  situation  is  that  those  four  will  prob- 
ably be  represented  by  a  third  at  least  more  dollars 
than  the  eight  were.  Expression  of  production  in 
dollars  is  now  meaningless.  We  have  stopped  think- 
ing of  work  in  terms  of  production.  We  are  thinking 
in  dollars  and  that  gets  us  into  trouble  with  profits,  i 
Finding  that  wages  paid  in  excess  of  the  value  of 
the  services  rendered  do  not  buy,  and  seeing  that  most 
companies  are  exhibiting  balance  sheets  containing 
large  surplus  and  profit  items,  the  mind  of  the  worker 
is  turning  or  being  turned  to  sharing  in  those  profits. 
The  wages  of  labour  are  expressed  in  great  sums  and 
the  wage  looks  small  beside  the  profit.  Well-mean- 
ing persons  often  suggest  that  a  share  of  the  profits 
of  industry  belongs  to  the  worker.  No  two  groups 
quite  agree  on  what  that  share  should  be  or  who 
should  determine  it.  Some  would  confuse  wages, 
which    are    part   of    the    cost    of    doing    business, 


90        COMJMON  SENSE  AND  LABOUR 

with  profits  which  are  the  result  of  successful  busi- 
ness and  add  an  indeterminate  part  of  the  profits 
to  the  wage.  Others  advocate  profit  sharing  as  a 
step  toward  the  worker's  ultimate  control  of  capital. 
There  is  a  reason  for  the  second  position,  but  none 
at  all  for  the  first,  when  it  is  urged  by  those  who  are 
convinced  that  the  capitahstic  system  is  the  best. 

And  that  profit  sharing  does  not  offer  a  solution 
for  proper  wage  payment  is  proved  by  its  operation 
in  practice.  Arising  out  of  a  delusion  as  to  what  prof- 
its are,  it  falls  down  when  the  workers  discover  that 
the  great  sums  they  thought  they  would  get  do  not 
amount  to  much  after  all,  when  divided  up.  If  the 
most  profitable  corporations  agreed  to  share  the  en- 
tirety of  their  profits — not  a  portion,  but  all — and 
the  share  were  added  to  wages,  the  increase  of  the 
wage  would  seldom  amount  to  5  per  cent. — and  a 
wage  increase  of  5  per  cent,  is  scorned.  The  German 
steel  and  munitions  companies  are  supposed  to  have 
made  immense  profits  during  the  war.  An  investi- 
gator took  the  sixty-six  highest-profit  companies; 
they  had  a  combined  capital  of  $625,000,000.  He 
found  that  over  a  ten-year  period  the  entire  profits, 
if  divided  per  capita  among  the  workers  employed, 
would  increase  wages  only  2|  cents  an  hour! 


COMMON  SENSE  AND  LABOUR        91 

An  enormous  confusion  exists  about  profits  and 
what  they  are.  Mere  bulk  seems  to  be  a  crime.  For 
instance,  the  man  who  starts  in  business  with  a  capital 
of  $1,000  and  cannot  net  more  than  $100  profit,  that 
is,  10  per  cent,  a  year,  finds  himself  unable  to  exist, 
but  the  corporation  with  a  capital  of  $10,000,000 
which  could  consistently  earn  10  per  cent,  would  be 
classed  as  a  particularly  shameless  example  of  what 
combinations  of  capital  can  do  to  the  plain  people. 

Then,  too,  both  the  workers  and  the  public  are 
apt  to  look  askance  at  the  difference  between  the  cost 
of  the  raw  material  and  the  cost  of  the  finished  article 
and  to  say  mysteriously  that  "somebody  is  getting 
theirs."  It  is  true  that  in  every  line  the  progression 
from  the  raw  to  the  finished  state  is  exceedingly 
cumbersome  and  needlessly  expensive,  but  in  most 
cases  it  is  nobody  in  particular,  but  waste  in  general, 
that  consumes  the  enormous  price  addition.  It  is 
perfectly  ridiculous  that  the  average  article  should 
at  least  double  in  price  between  the  time  it  leaves  the 
factory  and  the  time  that  it  reaches  the  hands  of  the 
ultimate  consumer.  But  that  is  rarely  due  to  prof- 
iteering or  to  any  illegitimate  practice;  it  is  due  to 
lack  of  organization  and  the  desire  of  people  to  have 
things  sold  to  them  rather  than  to  buy. 


92        COMMON  SENSE  AND  LABOUR 

For  instance,  the  average  person  finds  it  exceed- 
ingly inconvenient  and  expensive  to  carry  home  pur- 
chases and  would  prefer,  even  at  an  added  cost, 
to  have  them  deUvered.  It  is  rare  to  find  any  in- 
dividual who  does  not  believe  in  life  insurance,  and 
it  is  well-known  that  premiums  would  be  very  much 
lower  if  the  selling  expenses  were  eliminated.  Yet 
every  experiment  in  selhng  life  insurance  over  the 
counter  instead  of  through  agents  has  resulted  in 
something  pretty  close  to  failure.  Or  take  a  staple. 
Wheat,  of  course,  does  not  have  to  be  advertised — it  is 
not  bought  in  the  grain  form  by  the  ultimate  consumer. 
But  to  sell  flour  or  bread  in  large  quantities  to  the 
consuming  public,  it  is  absolutely  necessary  to  trade- 
mark the  product  and  advertise  it.  The  housewife, 
confronted  at  the  grocer's  with  Brand  A  flour — 
which  she  has  never  heard  of,  and  Brand  B — which 
she  sees  advertised — will  buy  Brand  B,  although  it 
may  be  quite  a  little  dearer  than  Brand  A. 

Human  nature  is  what  it  is  and,  although  we  may 
rail  at  its  perversities,  it  is  likely  to  stay  with  us  for 
some  time  to  come,  even  against  the  objections  of  the 
reformers. 

The  general  ignorance  of  what  capital  is  and  how 
profits  are  made  is  well  illustrated  by  an  experience 


COMMON  SENSE  AND  LABOUR        93 

of  H.  C.  Osborn,  president  of  the  American  Multi- 
graph  Company  of  Cleveland.  That  company  for 
some  years  did  not  pay  a  dividend.  For  the  last 
several  years  it  has  paid  fair-sized  dividends — al- 
though the  return  on  the  money  invested  would  not 
be  to  date  as  great  as  if  that  same  money  had  been 
deposited  in  the  ordinary  savings  bank.  After  a 
recent  dividend  period  one  of  the  workers  congratu- 
lated Mr.  Osborn  and  told  him  he  must  feel  fine  to 
be  making  so  much  money.  A  little  inquiry  brought 
out  the  fact  that  the  worker  thought  that  the  presi- 
dent received  the  entire  earnings  just  as  if  he 
were  a  proprietor  and  not  a  fellow  worker.  This 
man  had  heard  of  stockholders,  but  had  little  com- 
prehension of  what  part  they  played.  Right  then 
and  there  Mr.  Osborn  decided  to  start  a  shop  course 
in  economics.  He  discovered  that,  although  many 
of  the  workers  knew  the  terms,  they  knew  absolutely 
nothing  of  corporate  organization,  of  the  fact  that 
legitimately  issued  stock  represents  money  invested, 
that  a  corporation  has  expenses  other  than  those  for 
wages  and  material — that,  for  instance,  it  must  con- 
sider fixed  charges,  depreciation,  and  services  to  cus- 
tomers— or  that  it  cost  a  great  deal  of  money  to 
advertise  and  sell  machines.    He  i**  proceeding  with 


94        CO]\IMON  SENSE  AND  LABOUR 

his  course  in  very  simple  fashion,  explaining  step  by 
step,  with  illustration  and  diagrams,  that  which  we 
call  the  cycle  of  business  as  applied  to  his  own  par- 
ticular institution. 

In  the  course  of  one  of  these  talks  he  brought  in 
the  model  of  the  first  machine.  It  was  a  crude  affair 
bearing  about  the  same  resemblance  to  the  present- 
day  machine  that  the  Robert  Fulton  does  to  the 
Mauretania,  Its  appearance  created  great  merri- 
ment. Mr.  Osbom  asked  how  many  of  them  would 
be  wilHng  to  contribute  their  savings  to  the  develop- 
ment of  a  commercial  article  from  a  contrivance  such 
as  they  saw  before  them.  Not  a  man  in  the  crowd 
could  conceive  of  doing  such  a  thing! 

Changing  the  scenery,  one  might  present  this  same 
lesson  with  almost  any  money -making  specialty  that 
is  on  the  market  to-day.  The  first  cash  register  was 
merely  a  device  which  pimched  holes,  representing  a 
nickel  each,  in  a  strip  of  paper;  the  storekeeper  had 
to  count  these  holes  at  the  end  of  the  day  to  discover 
what  his  sales  had  been.  Yet  Mr.  Patterson  took 
what  money  he  had  made  in  the  coal  business  and 
put  it  all  behind  the  development  of  this  crazy  device. 
How  many  of  the  people  who  now  clamour  for  the 
profits  of  industry  would  contribute  their  labour. 


COMMON  SENSE  AND  LABOUR        95 

which  they  say  is  the  source  of  money,  to  promote 
an  invention? 

The  workman  does  not  want  to  be  a  part  of  in- 
dustry; he  wants  to  share  in  profits  not  as  a  partner 
but  as  a  vulture.  And  in  this  position  he  is  perfectly 
human  and  perfectly  right.  As  I  have  pointed  out 
in  a  previous  chapter  there  is  no  partnership  be- 
tween labour  and  capital,  and  it  is  just  as  untrue  to 
say  that  labour  has  a  right  to  profits  because  capital 
is  the  result  of  labour  as  it  would  be  to  say  that 
capital  had  a  right  to  labour  because  if  there  were  no 
capital  there  would  be  no  wages.  Labour,  demand- 
ing that  capital  be  turned  over  to  it,  is  in  no  better 
position  than  the  bandit  waiting  to  rob  the  gold 
train  as  it  comes  over  the  hill  from  the  mine. 

The  profit  of  capital — a  part  of  which,  if  the  owner 
is  forehanded,  goes  to  augment  his  capital — is  some- 
times, it  is  true,  the  result  of  sheer  luck;  but  more 
often  it  is  due  to  exceedingly  skilful  management  and 
good  selHng.  That  is  really  no  affair  of  the  work- 
men; it  is  the  affair  of  the  executives.  Honest  profit- 
sharing  plans  in  which  only  the  executives  partici- 
pate are  commonly  successful.  Those  including  the 
workers  which  are  called  successful  will,  on  study, 
be  found,  as  a  rule,  not  to  be  profit-sharing  at  all;  or 


96        COMMON  SENSE  AND  LABOUR 

they  will  be  found  to  be  cases  in  which  the  workmen 
have  been  receiving  their  regular  wages  and  then 
have  accepted  a  share  of  the  profits  as  a  donation. 
And,  even  in  such  cases,  dissatisfaction  invariably 
follows  a  bad  profit  year. 

The  life  of  the  average  profit-sharing  scheme  does 
not  exceed  five  years  and  I  am  unaware  of  any  case 
in  which  the  workers  agreed  to  share  losses  as  well 
as  profits. 

Of  true  profit-sharing  schemes  there  are  very  few. 
One  is  an  optical  works  in  Germany.  The  philan- 
thropic founder  left  these  works  in  trust  for  the  em- 
ployees. The  wages  and  salaries  are  paid  according 
to  the  respective  worths  of  the  people — that  is,  the 
president  gets  a  president's  wage  and  the  office 
boy  gets  an  office  boy's  wage.  At  the  end  of  the 
year  the  president  and  the  office  boy  are  cheek  by 
jowl  in  the  sharing  of  profits,  each  getting  exactly 
the  same  amount.  But  this  is  mutuality  of  owner- 
ship and  not  sharing  profits  with  capital. 

Another  profit-sharing  plan  which  has  worked  very 
successfully  again  is  not  really  profit-sharing  at  all. 
The  South  Metropolitan  Gas  Company  in  London, 
by  the  creating  Act  of  Parliament,  is  permitted  to 
pay  a  dividend  of  4  per  cent,  upon  its  shares  and  to 


COMMON  SENSE  AND  LABOUR        97 

charge  Ss.  Id.  per  1,000  cubic  feet  of  gas.  The  Act 
further  authorizes  it  to  pay  an  additional  dividend 
of  2.8  per  cent,  for  each  reduction  of  one  penny  in 
the  price  of  gas.  That  is,  the  more  cheaply  the  gas 
sells,  the  greater  may  be  the  dividend.  The  com- 
pany, as  an  incentive  to  economy,  proposed  to  pay 
its  workers  |  per  cent,  extra  for  each  penny  reduction 
in  the  price  of  gas.  They  pay  ordinary  current  wages, 
and  this  extra  percentage  to  workers  is  really  more 
in  the  way  of  a  bonus  for  economy  than  a  sharing  of 
profits.  The  dividend  to  the  employees  has  reached 
as  much  as  8 J  per  cent,  and  the  scheme  has  been  so 
generally  successful  that  it  has  been  adopted  by 
nearly  all  of  the  gas  companies  throughout  England 
which  hold  similarly  phrased  charters. 

The  J.  C.  van  Marken  Press  at  Delft,  Holland, 
presents  a  most  interesting  example  of  a  forward- 
looking  profit-sharing  scheme.  Of  all  Van  Marken 's 
experiments  with  his  industrial  companies  of  Hof  van 
Delft,  the  ultimate  is  the  printing  company.  The 
shares  of  stock  were  serially  numbered  and  the  com- 
pany reserved  the  right  to  retire  the  shares  at  par,  ac- 
cording to  the  serial  numbers,  with  the  design  that  the 
workers  might  eventually  acquire  the  capital — that 
is,  acquire  the  means  of  production.     This  capital 


98        COMMON  SENSE  AND  LABOUR 

stock  is  entitled  to  a  6-per-cent.  cumulative  dividend 
and  of  the  remaining  profit,  25  per  cent,  goes  to  the 
managers  for  their  labours,  50  per  cent,  to  the  work- 
men shareholders,  3  per  cent,  to  the  commissioners, 
and  12  per  cent,  to  the  founders.  This  12  per  cent, 
is  a  imique  feature,  representing  Mr.  van  Marken's 
estimate  of  the  reward  which  capital  should  have  over 
and  above  the  ordinary  return  upon  investment,  for 
its  adventurous  spirit  in  risking  the  money  in  the 
first  instance.  The  right  of  this  additional  compen- 
sation extends  only  to  the  original  shareholders  and 
is  personal,  ceasing  with  death. 

The  workers  are  paid  a  minimum  wage — that  is, 
a  wage  calculated  for  support  and  nothing  more. 
Their  share  of  the  profits  is  not  paid  in  cash,  but 
goes  to  a  savings  account.  When  the  amount  of  the 
fund  to  the  credit  of  any  worker  reaches  100  florins, 
it  is  immediately  applied  to  the  purchase  for  him 
of  a  share  of  the  capital  stock — the  original  holder 
of  that  share  being  forced  to  sell  imder  the  agreement 
and  pass  out  of  the  company.  In  the  first  four 
years  one  third  of  the  capital  stock  had  thus  lodged 
in  the  hands  of  the  workers;  in  the  course  of  the 
next  fifteen  years  all  the  original  stockholders  had 
been  retired.     But  by  that  time  some  of  the  workmen 


COMMON  SENSE  AND  LABOUR        99 

stockholders  had  died  and  their  stock  had  passed 
into  their  estates,  while  others  had  left  the  service 
of  the  company.  So  the  ownership  was  not  with 
the  workers.  However,  this  stock  was  on  exactly 
the  same  basis  as  the  stock  of  the  original  stockhold- 
ers and  as  the  savings  of  a  then  worker  reached  100 
florins,  a  share  of  stock  automatically  passed  to  him. 
Thus,  the  entire  capital  stock  slowly  revolves  in 
ownership,  the  idea  in  Mr.  Van  Marken's  mind  being 
that  the  workers  should  have  always  a  direct  identity 
with  the  shareholders. 

Workers  who  have  not  yet  accumulated  sufficient 
savings  to  buy  stock  are,  however,  regarded  as  mem- 
bers of  the  corporation.  During  his  first  year  of 
service  a  worker  has  one  vote  on  a  parity  with  the 
stockholder  and  an  additional  vote  for  each  two  years 
of  work  up  to  a  maximum  of  six  votes.  Shareholders, 
also,  regardless  of  the  blocks  they  hold,  are  restricted 
to  a  maximum  of  six  votes.  I  visited  this  plant 
during  1919  and  I  was  informed  that  the  general 
desire  was  to  change  the  scheme — that  the  workers 
preferred  higher  wages  to  stock  ownership,  and  that, 
because  of  the  low  basic  wage  paid,  it  was  decidedly 
hard  to  get  men  to  work. 

For  thirty  years  past  the  Procter  &  Gamble  Com- 


100      COMIVION  SENSE  AND  LABOUR 

pany  have  had  some  form  of  profit-sharing  and  their 
experiences  are  interesting.  Back  in  1887  a  certain 
part  of  the  year's  earnings  was  set  aside  and  distrib- 
uted in  cash  to  all  employees  in  proportion  to  their 
wages.  The  amounts  appropriated  caused  dissatis- 
faction. Then  the  company  fixed  the  employee's  divi- 
dend at  the  same  rate  as  that  paid  upon  the  common 
stock  of  the  company.  It  will  be  noted  that  there  is 
no  reason  whatever  for  making  these  rates  the  same, 
but  that  thus  fixing  the  rate  is  merely  a  way  of  shut- 
ting off  superfluous  discussion.  Up  until  1903  this 
percentage  upon  the  wage  was  distributed  in  cash 
twice  a  year  and  with  this  officially  announced 
result: 

"During  this  time  the  expectation  that  it  would 
result  in  greater  and  more  efficient  effort  on  the  part 
of  the  employees  was  not  reahzed.  Not  with  the 
majority.  The  dividend,  coming  as  it  did,  at  stated 
intervals  in  lump  sums,  tended  rather  to  defeat  its 
purj>ose  than  to  further  it.  It  had  a  tendency  to- 
ward extravagance  and  became  a  distinctly  demoral- 
izing influence.  The  money  was  spent  and  over- 
spent before  they  received  it.  It  was  looked  upon 
as  additional  wages  and  had  not  the  effect  upon  the 
majority  of  increasing  their  loyalty  and  interest  and 


COMMON  SENSE  AND  LABOLIr;     101^ 

of  adding  to  their  prosperity  and  material  comfort 
gathered  from  saving  and  the  habit  of  saving." 

The  company  then  abandoned  profit-sharing, 
in  so  far  as  cash  distribution  was  concerned,  and 
adopted  profit-sharing  as  a  means  to  enforce  thrift 
through  stock  ownership.  The  plan  is  one  which  has 
been  adopted  with  various  modifications  by  quite  ^ 
a  number  of  companies.  Any  employee  who  has 
been  in  the  service  of  the  company  for  30  days  or 
more  may  apply  to  the  trustee  to  buy  for  him  in  the 
open  market  and  at  the  market  price  an  amount  of 
stock  equal  in  par  value  to  his  yearly  wages.  It 
takes  about  five  years  to  pay  for  this  stock.  At  the 
end  of  that  time  the  employee  owns  his  stock  outright 
and  receives  dividends  as  would  any  other  stock- 
holder. A  further  development  of  the  plan  is  sav- 
ings certificates  in  the  denomination  of  $100  each, 
issued  by  the  trustees  and  bearing  6  per  cent,  interest. 
These  the  employees  may  purchase  by  depositing 
5  per  cent,  of  their  wages  and  adding  the  dividends 
under  the  profit-sharing  plan.  The  profit-sharing 
dividend  itself  is  scarcely  profit-sharing  at  all,  but 
rather  a  donation  from  the  company's  earnings  as  a 
bonus  for  length  of  service. 

A  person  employed  throughout  one  year  receives 


liH      COMMON  SENSE  AND  LABOUR 

10  per  cent,  advance  upon  wages,  and  thereafter 
an  additional  1  per  cent,  per  year  until  the  maximum 
of  20  per  cent,  has  been  reached. 

In  all  fairness  it  cannot  be  said  that  the  plan  is 
either  a  success  or  a  failure.  In  the  old  stock -purchas- 
ing plan,  the  maximum  participation  was  60  per  cent, 
and  of  the  remaining  40  per  cent,  perhaps  15  per  cent, 
were  ineligible  because  they  were  transient  workers, 
while  the  remaining  25  per  cent,  were  those  who 
never,  under  any  circumstances,  were  able  to  accumu- 
late the  2^  per  cent,  of  the  purchase  required  for  the 
initial  deposit. 

There  are  numerous  other  instances  of  profit- 
sharing  about,  but  the  essentials  are  all  the  same, 
and  excepting  where  the  distribution  is  solely  with 
executives,  or  where  the  circumstances  are  quite 
peculiar,  I  am  unable  to  find  that  the  mere  sharing 
of  profits  has  the  remotest  influence  in  bettering  the 
relation.  The  first  distribution  of  profits  is  always 
greeted  with  wild  enthusiasm — just  as  would  be  any 
other  substantial  largesse.  But  there  is  never  the 
slightest  disposition  to  accept  the  profits  of  the  future 
in  the  place  of  wages  in  the  present — the  profits 
must  be  in  addition  to  everything  else.  Every 
plan  tried  in  America,  based  on  the  Van  Marken  idea 


COMMON  SENSE  AND  LABOUR       103 

of  paying  a  scant  living  wage — or  even  a  full  living 
wage — with  the  prospect  of  bringing  the  eventual 
wage  to  considerably  above  what  might  be  called  the 
market  rate  by  the  distribution  of  profits,  has  failed 
when  applied  to  workers. 

In  the  case  of  executives  the  situation  is  quite 
different.  It  is  the  direction  of  the  higher  executives 
which  really  makes  the  profits.  These  men  do  the 
buying,  the  selling,  the  borrowing,  and  all  of  the 
manoeuvring  so  necessary  to  business.  If  a  season 
is  not  successful  they  know  why.  There  is  no  mys- 
tery about  depreciation  and  reserve;  and,  working 
in  February,  they  can  visualize  a  profit  to  be  paid  in 
December.  It  has  therefore  become  the  practice 
among  forward-looking  organizations  to  have  the 
executives  who  manage  the  capital  share  in  the  fruits 
of  their  efforts.  In  the  National  Cash  Register 
Company,  for  instance,  the  fixed  salaries  paid  to 
executives  are  quite  low  but  they  share  in  the  profits 
to  such  an  extent  that  this  share  will  often  equal  or 
exceed  the  entire  year's  salary.  In  other  corporations 
the  executives  and  higher  employees  are  permitted 
to  buy  a  certain  number  of  shares  of  stock  under  an 
agreement  to  resell  them  when  their  connection  with 
the  company  terminates.     They  commonly  do  not 


104      COMMON  SENSE  AND  LABOUR 

pay  any  money  for  this  stock,  but  merely  give  a 
promissory  note  for  the  full  purchase  price  with  the 
stock  as  collateral.  This  plan  has  the  earmarks 
of  stock  participation  but,  as  a  matter  of  fact,  it  is 
only  an  easy  way  of  adding  a  bonus  to  the  salary 
based  upon  the  earnings  of  the  company — it  cuts 
out  a  lot  of  mathematics. 

Then  there  are  the  numerous  plans  by  which  the 
employees  of  companies  are  encouraged  and  aided 
in  the  purchase  of  the  stock  of  the  company.  The 
most  notable  of  this  kind  is  that  of  the  United  States 
Steel  Corporation, by  which, under  a  partial-payment- 
plan  system,  employees  may  buy  stock.  This  plan 
is  very  well  thought  of  indeed  by  a  number  of  leading 
business  men  of  the  country,  as  making  for  an  iden- 
tity of  interest  between  the  worker  and  the  stock- 
holder. 

But  it  is  strongly  to  be  doubted  if  the  number  of 
shares  held  by  the  rank  and  file  of  employees  is  suflS- 
cient  to  give  them  a  real  interest,  or  that  the  dividends 
which  they  receive  are  sufficiently  large  to  make  them 
realize  that  there  is  a  connection  between  the  daily 
work  and  the  semi-annual  dividend.  It  is  urged, 
and  it  would  seem  reasonable  to  believe,  that  if  even 
10  per  cent,  of  the  employees  of  a  corporation  were 


COMMON  SENSE  AND  LABOUR       105 

also  owners  of  its  stock,  they  then  would  act  as  a 
leaven  in  the  mass  and  make  for  better  and  more 
cooperative  work.  The  devotees  of  stock  ownership 
are  always  ready  with  numerous  instances  in  which 
the  faithful  workmen-stockholders,  warring  against 
waste,  bring  in  bits  of  metal  lost  on  the  roadway  and 
they  recount  how  these  conscientious  souls  chide 
their  fellow  workers  for  acts  against  the  best  interest 
of  the  company  and  therefore  against  the  value  of 
the  stock.  I  have  looked  into  quite  a  number  of 
these  shining  examples  and  find  most  of  them  merely 
expressions  of  a  renewed  Hcense  to  be  a  busybody. 
The  self-conscious  virtue  of  the  fledgling  stockholder 
is  more  apt  to  irritate  his  fellows  than  to  help  the 
company. 

The  opportunity  to  purchase  stock  in  the  corpora- 
tion for  which  he  works  is  properly  to  be  regarded  not 
at  all  as  a  method  of  adjusting  the  relation  between 
labour  and  capital,  or  of  increasing  mutual  pro- 
ductivity, but  solely  as  a  means  of  encouraging  stal- 
wart independence  through  thrift.  And,  from  a 
practical  investing  standpoint,  it  is  more  than  doubt- 
ful if  a  worker  should  be  encouraged  to  elect  the  one 
institution  to  be  not  only  the  source  of  his  present 
income,  but  also  the  repository  of  his  savings. 


106      COMMON  SENSE  AND  LABOUR 

But  you  cannot  have  a  meal  of  bear  meat  unless 
first  you  have  a  bear.  You  cannot  well  share  profits 
or  make  the  purchase  of  corporate  stock  desirable 
unless  you  have  profits.  Accept  all  the  theories  of 
profit-sharing  at  face  value  and  \sithout  investiga- 
tion, say  that  it  is  a  success  whenever  tried — what 
are  you  going  to  do  about  the  workers  for  the  com- 
panies which  do  not  earn  profits?  One  out  of  every 
five  enterprises  started  in  the  United  States  fails; 
of  those  that  continue  in  business,  only  about  20 
per  cent,  show  profits.  Complementary  to  universal 
profit-sharing  should  be  a  demonstration  of  how  not 
to  fail  in  business.  Until  all  business  is  invariably 
successful,  profit-sharmg  is  hardly  the  way  to  pay 
wages.  The  man  working  for  the  skilfully  managed 
company  that  earns  a  lot  of  money  is  commonly  no 
more  efficient  than  the  man  working  for  the  poorly 
managed  company  that  fails.  \Miy,  if  their  respec- 
tive working  talents  are  about  equal,  should  the  first 
worker  get  more  than  the  second?  The  one  had 
nothing  to  do  with  the  profits  nor  the  other  with  the 
losses. 

The  satisfactory  way  of  paying  a  man  is  for  what 
he  does.  If  he  makes  a  good  article  at  a  right  price, 
or  otherwise  performs  a  satisfactory  service,  then  he 


COMMON  SENSE  AND  LABOUR      107 

can  and  should  be  paid  adequately.  It  is  up  to  the 
employer  to  make  the  profit.  If  the  employer  can- 
not make  a  profit,  he  has  merely  demonstrated  that 
he  is  incompetent  to  be  charged  with  the  manage- 
ment of  capital.  The  larger- visioned  employers 
all  recognize  to-day  that  the  man  who  wants  to  pay 
low  wages — who  wants  to  pay  less  than  is  justly 
due — is  more  of  a  menace  to  the  wage  system  than 
the  Bolshevik.  The  doctrine  that  low  wages  are 
cheap  has  been  pretty  well  exploded. 

But  what  is  adequate  payment  .^^  There  can  be  no 
rule  until  mankind  has  been  ironed  into  uniformity 
— which  will  probably  take  a  little  while.  There 
are  grades  of  labour  and  grades  of  men.  The  street 
sweeper  is  not  on  a  par  with  the  watchmaker  although 
he  may  have  greater  potentialities.  Christian  Girl, 
the  president  of  the  Standard  Parts  Company  of 
Cleveland,  once  swept  the  streets  of  Cleveland,  but 
he  did  not  insist  that  as  a  street  sweeper  he  should 
be  paid  the  salary  that  he  now  gets  as  the  president 
of  a  great  organization.  And  thus  we  cannot  escape 
getting  back  to  the  controlling  relation  between  the 
wage  and  the  work.  And  through  the  work  it  is  al- 
ways possible  to  arrive  at  the  "adequate"  payment. 

In   the   case   of   Baldwin's,   Disston's,    and   the 


108      COMIVION  SENSE  AND  LABOUR 

Endicott-Johnson  Company,  which  have  been  set 
up  as  models,  the  relations  between  the  company  and 
the  men  are  so  intimate  and  the  knowledge  of  the 
work  is  so  mutually  exact  that  striking  the  wage 
bargains  with  individuals  gives  no  trouble.  But  all 
concerns  cannot  have  that  marvellous  mutuality — 
they  must  find  a  mechanical  means  of  arriving  at 
the  same  end,  but  always  upon  the  same  basis  of 
fitting  the  wage  to  the  work.  The  problem  of  the 
adequate  wage,  of  attaining  the  right  balance,  is 
quite  impossible  when  a  general  solution  is  sought, 
but  it  is  quite  easy  when  it  is  treated  as  a  matter  of 
cases  and  not  of  universal  law. 

The  methods  differ  but  they  all  proceed  upcn  prin- 
ciples, and  these  principles  have  been  best  stated  by 
WiUiam  R.  Basset  thus: 

1.  In  order  to  get  any  logical  fixing  of  wages  it  is  necessary  first 
to  throw  away  all  ideas  of  how  much  a  man  ought  to  get.  A 
man  ought  to  get  what  he  earns,  no  more  and  no  less;  and  I  con- 
sider what  is  called  the  market  rate  of  wages — whether  it  happens 
to  be  the  standard  wage  of  the  community  or  a  rate  fixed  by  the 
union — as  in  the  nature  of  a  minimum  wage  for  that  class  of 
work. 

2.  There  is  no  reason  why  a  machinist  should  not  make  $100 
or  even  $200  a  week  if  he  returns  that  much  service.  And  the 
point,  therefore,  is  not  the  gross  amount  that  a  man  makes,  but 
the  cost  of  his  services  per  unit  to  the  company.    If  a  man  makes 


COMMON  SENSE  AND  LABOUR      109 

$50  a  week  when  turning  out  10  units  per  hour,  I  can  well  afford 
to  pay  him  $100  a  week  if  he  turns  out  20  well-made  units  in  one 
hour,  for  there  is  so  much  less  overhead  per  unit  on  the  20  scale 
than  on  the  10  that  it  costs  me  less  per  unit  to  pay  $100  per  week 
than  to  pay  $50.  This  is  a  self-evident  point  which  is  very  often 
neglected  and,  because  it  is  neglected,  the  whole  subject  of  wages 
is  in  a  chaotic  condition. 

3.  In  a  very  large  number  of  cases  the  piece  rate  is  fixed  by 
rule-of-thumb  and  the  rate  is  lowered  whenever  it  appears  to  the 
foreman  or  superintendent  that  the  man  is  making  too  much 
money.  If  the  rate  were  right  in  the  first  place  it  should  not  be 
lowered  because  the  man  is  making  money — unless  the  increased 
production  is  brought  about  solely  by  managerial  skill.  But 
the  rate  is  not  usually  right  in  the  first  place,  because  it  is  unfor- 
tunately rare  to  find  a  scientifically  set  rate. 

4.  The  average  rate  is  based  upon  someone's  guess  as  to  what 
a  man  may  do — whereas  it  should  be  based  upon  a  scientific 
time  study. 

5.  The  use  of  the  stop-watch  is  opposed  by  most  workers 
largely  because  it  has  been  ill-used  in  the  past,  but  if  you  have  a 
rate  committee  to  which  is  intelligently  explained  the  basis  of 
time  study,  and  their  services  enlisted  to  obtain  the  proper  study, 
this  opposition  will  disappear. 

6.  I  think  it  is  very  proper  for  a  worker  to  object  to  having  an 
incorrect  time  study  forced  down  his  throat  and  made  the  basis 
for  a  rate  which  forces  him  at  an  inhuman  pace  in  order  to  claim 
a  bare  sustenance. 

7.  I  do  not  favour  piece  rates  nor  any  other  one  form  of  paying 
wages,  because  there  is  no  universal  wage  method.  I  have  fre- 
quently installed  three  or  four  different  bases  of  payment  in  the 
same  shop,  because  only  in  such  manner  could  we  even  approxi- 
mate fairness. 

8.  But  I  think  that  every  form  of  wage  payment  should  also 


no      COMMON  SENSE  AND  LABOUR 

include  an  incentive — an  individual  incentive,  so  that  a  man  may 
be  rewarded  on  both  the  quality  and  the  quantity  of  what  he 
does — and  right  here  let  me  say  that  quality  is  always  more  im- 
portant than  quantity,  and  it  has  been  my  unvarying  experience 
that  where  we  stressed  the  quality  element,  we  awakened  the 
spirit  of  craftsmanship  and  the  quantity  took  care  of  itself.  In 
addition  to  the  individual  incentive  I  believe  in  stimulating  co- 
op>eration  between  employees  by  providing  group  or  departmental 
incentives;  this  need  not  be  large  and  sometimes  does  not  have 
to  be  paid  in  money;  but,  generally  speaking,  a  small  money  in- 
centive, combined  with  a  certain  amount  of  publicity  to  engage 
the  natural  instinct  of  competition,  will  produce  splendid  results. 
I  have  kno^Ti  production  to  be  nearly  doubled  under  such  cir- 
cumstances. 

9.  Hand  in  hand  with  incentives  goes  the  teaching  of  right 
methods,  the  elimination  of  wastes,  and  the  proper  planning  of 
work.  WTien  all  of  these  elements  are  present,  the  raising  of  a 
wage  is  purely  incidental,  for  then  the  increments  are  taken  out 
of  the  former  wastes — which  is  as  it  should  be. 


CHAPTER  FIVE 

THE    FETISH    OF   INDUSTRIAL   DEMOCRACY 

What  does  industrial  representation  amount  to? 
"The  democratization  of  industry"  is  rapidly  be- 
coming a  cant  phrase.  It  is  alluring  just  as  profit- 
sharing  is  alluring,  because  it  can  mean  a  great  many 
things.  As  somebody  well  said  not  long  since,  we 
are  becoming  a  world  that  loves  phrases.  The  ideal 
phrase  is  one  that  no  one  can  exactly  define,  but 
with  which  everyone  can  agree  in  a  general  way. 
We  find  the  most  staid,  what-is-the-world-coming-to 
sort  of  manufacturer  nodding  his  head  in  approval 
at  the  phrase  and  also  we  find  the  craziest  and  most 
violent  radical  yelling  and  waving  a  red  flag  at  the 
same  utterance.  Which  gives  pause  for  comment — 
although  it  is  bad  form  to  inquire  into  popular 
phrases.  One  of  the  reasons  for  this  general  agree- 
ment that  industry  should  be  put  upon  a  democratic 
basis  may  be  found  in  the  general  disagreement  as  to 
what  democracy  is.     Styles  in  democracy  shift  more 

rapidly  than  styles  in  women's  clothing. 

Ill 


112      COMMON  SENSE  AND  LABOUR 

The  hide-bound  autocratic  employer  usually  means 
by  democracy  in  industry  that  he  intends  to  hand- 
pick  a  certain  number  of  employees  and  call  them  a 
shop  committee.  Or  again,  in  the  case  of  a  corpora- 
tion, he  and  his  fellows  may  arrange  for  the  most  revo- 
lutionary departure  of  putting  one  or  two  employees 
upon  the  board  of  directors.  \Mien  one  or  both  of 
these  acts  have  been  committed,  the  demands  of 
democracy  are  supposed  to  have  been  satisfied,  and 
autocracy,  if  not  annihilated,  at  least  amehorated. 
Starting  from  this  lip-service  type  and  ranging  down 
the  line,  one  meets  with  other  forms  of  democracy 
in  variously  coordinated  and  uncoordinated  shop 
conmiittees,  organized  as  committees  or  as  legisla- 
tive bodies,  until  finally  one  reaches  the  radicals  to 
whom  the  phrase  connotes  a  species  of  state  socialism. 
One  passes  on  to  the  extreme  radicals  who  understand 
by  this  democracy  the  annihilation  of  capital  and 
the  entire  control  of  industry  through  elective  and 
easily  recalled  committees.  And  one  stops  only  with 
the  ultra-extreme  radicals,  who  conceive  that  the 
only  form  of  industrial  democracy  is  the  autocracy 
of  the  proletariat.  The  democratization  of  industry 
is  easily  the  most  ecumenically  satisfying  phrase  now 
at  large. 


COMMON  SENSE  AND  LABOUR      113 

A  further  reason  that  we  can  have  so  many  inter- 
pretations of  the  term  is  because  so  much  confusion  of 
thought  exists  concerning  industry  itself  and  more 
especially  concerning  what  capital  is  and  does,  and 
who  pays  wages  and  why.  Practically  every  dis- 
cussion of  industrial  relations  eventually  gets  back  to 
the  discusser's  conception  of  the  function  of  capital. 

Let  us  get  the  facts  squarely  in  mind  and  segregate, 
so  to  speak,  a  few  of  the  meanings  of  democracy  in 
industry.  If  it  be  taken  in  its  broadest  sense,  then 
you  must  evolve  a  system  of  industry  in  which  there 
is  neither  employer  nor  employed,  but  where  all  are 
employees  on  an  equal  basis  of  pay  quite  regardless  of 
skill.  And  unless  we  can  conceive  a  society  in  which 
all  authority  shall  be  equal,  that  is,  which  shall  be 
both  headless  and  footless,  then  to  be  thoroughly 
democratic  any  leadership  should  rotate  through 
Soviets  or  committees.  This  programme  involves 
necessarily  the  abolition  of  the  private  ownership 
of  capital.  All  "direct-action"  movements  have  a 
society  of  this  general  nature  in  view,  although 
with  family  differences  which  they  consider  very 
important.  The  normal  human  being  need  not  con- 
cern himself  with  the  various  refinements  of  the  social 
revolutionists ;  they  all  are  heading  toward  an  event- 


114      CO:\IMON  SENSE  AND  LABOUR 

ual  production  for  use  as  opp)osed  to  production  for 
profit,  and  the  individual  disagreements  can  mostly 
be  put  down  as  of  gait.  Therefore,  if  we  discuss  the 
taking  over  by  the  Government  of  the  means  of 
production  and  the  management  of  those  means  by 
commimes  or  what-nots,  we  are  not  discussing  labour 
but  social  revolution — even  if  we  file  off  the  raw  edges, 
as  in  the  Plumb  Plan,  and  shy  at  force,  or  if  we 
sharpen  the  raw  edges  and  advocate  force  and  lots 
of  it,  as  do  the  I.  W.  W.  The  social  revolution  is 
not  a  labour  problem.  It  is  a  conception  of  a  new 
social  existence.  When  eminent  citizens  advocate 
the  equal  representation  of  the  employer  and  the 
employee  and  presumably  therefore  equal  authority 
in  management,  and  in  the  same  breath  talk  about 
dealing  justly  with  complaints  and  retaining  well- 
trained  employment  managers,  and  so  forth,  they 
are  discussing  an  equahty  which  can  exist  only  as  a 
pound  may  equal  a  quart.  The  chief  engineer  is, 
in  his  way,  as  important  as  the  captain,  but  he  does 
not  navigate  the  ship.  If  we  beheve,  and  most  of  us 
do  beheve,  in  the  private  ownership  of  capital,  then 
we  cannot  go  beyond  representative  regulation  and 
into  democratic  control.  It  is  important  to  bear 
this  in  mind  because  there  is  a  disposition  to  take  the 


COMMON  SENSE  AND  LABOUR       115 

field  in  full  cry  after  capital  as  guch,  yet  all  the  time 
disclaiming  that  its  private  ownership  is  to  be  killed 
when  caught. 

That  representation  in  industry  is  good  is  no 
longer  open  to  question,  but  it  is  equally  not  open  to 
question  that  mere  representation  as  such  is  of  no 
particular  moment.  A  great  many  employers  would 
like  to  think  that  merely  starting  up  some  kind  of  a 
representative  system  will  solve  all  the  problems  of 
industry — that  it  will  serve  as  a  substitute  for  nat- 
ural leadership  or  skill.  It  will  do  nothing  of  the 
kind,  as  experience  has  amply  shown,  and  the  only 
reason  for  the  many  unreasonable  expectations  of 
the  results  to  flow  from  representation  is  that  the 
situation  has  not  been  visualized  in  its  entirety. 

Under  our  capitalistic  system,  the  wages  of  both 
capital  and  labour  are  paid  out  of  production  and  out 
of  nothing  else.  Capital  does  not  pay  wages  and  it 
could  not  pay  them  for  more  than  a  week  or  two  at 
the  most,  even  if  it  wanted  to,  any  more  than  a  camel 
could  live  indefinitely  on  its  hump.  Without  pro- 
duction the  discussion  of  wages,  or  working  hours, 
or  conditions  is  academic.  That  is  one  of  the  chilling 
facts  of  existence.  Representation  in  industry,  then, 
is  valuable  when  it  aids  in  production  and  in  the  fair 


116      COMMON  SENSE  AND  LABOUR 

distribution  of  the  profits  of  production.  It  is  a 
means  to  an  end  and  not  an  end  in  itself. 

To  get  down  to  eases.  The  most  striking  and  am- 
bitious plan  of  general  representation  is  that  of  the 
Joint  Industrial  Councils  which  were  evolved  by  the 
Whitley  Committee,  appointed  by  Parliament  to 
devise  a  better  industrial  relation  for  Great  Britain. 
In  England  and  in  Scotland,  the  trades  imion  move- 
ment, which  had  achieved  remarkable  proportions 
before  the  war,  during  the  war  gained  something  ap- 
proaching an  ascendancy  of  industrial  Hfe.  The 
English  imions  are  ritualistic  bodies  divided  into 
sects  much  as  are  the  evangelical  churches,  but  they 
have  one  great  principle  in  common — that  there  is 
only  a  certain  amount  of  work  in  the  world  to  be  done 
and,  therefore,  the  longer  you  take  to  do  it  and  the 
more  men  are  required  in  the  doing,  the  more  jobs 
there  will  be  for  the  workingmen.  It  would  almost 
seem  that  any  industrial  propaganda  in  order  to  be 
popular  must  be  uneconomic! 

Affairs  were  coming  to  a  pretty  pass  in  England 
before  the  war,  and  during  the  war  the  Labour  party 
secured  an  enormous  number  of  rules  and  regulations 
of  various  kinds,  although  they  did  officially,  if  not 
individually,  promise  to  take  off  the  limit  on  produc- 


COMMON  SENSE  AND  LABOUR      117 

tion  and  permit  the  employment  of  imskilled  labours 
working  with  automatic  machinery,  which  had  not 
been  permitted  before  the  war.  It  was  apparent 
that  industry  could  not  resume,  when  the  war  ac- 
tivities had  ceased,  without  some  working  basis  be- 
tween  the  employers  and  the  employed,  and  to  that 
end  was  evolved  the  Whitley  Plan.  This  provided 
for  individual  workshop  committees,  made  up  of  rep- 
resentatives of  the  employer  and  the  employed;  Joint 
District  Councils,  made  up  of  delegates  of  the  local 
unions  and  the  employers'  associations  for  the  dis- 
trict; and  finally  a  National  Council  in  the  industry, 
similarly  composed  of  representatives  of  the  national 
unions  involved  and  the  national  employers'  associa- 
tions. The  plan  further  provided  for  the  stimulation 
of  the  study  of  industrial  methods,  but  essentially 
it  was  an  agreement  that  each  industry  should  be 
controlled  as  a  unit  by  a  national  coimcil  supervising 
local  councils,  which  should  in  turn  supervise  works 
management.  The  control  came  from  the  top,  not 
from  the  bottom,  for  although  the  shop  committee 
might  be  a  constructive  body,  primarily  it  was  a 
complaint  bureau  or  a  magistrate's  court  where  minor 
violations  of  the  rules  might  be  adjudicated.* 

*For  a  further  discussion  of  the  Whitley  Councils  see  Chapter  Nine. 


118      COjMMON  sense  AND  LABOUR 

It  would  not  be  fair  to  say  that  the  Whitley  Plan 
has  failed,  but  it  would  be  quite  untrue  to  say  that 
it  has  had  any  measure  of  success.  It  was  essentially 
a  categorical  prayer  for  the  status  quo  ante;  by  it  the 
unions  and,  more  important,  the  union  oflScers,  were 
practically  confirmed  in  their  offices,  and  the  "closed 
shop"  made  absolute.  At  once  the  proletarian 
movement  as  opposed  to  crafts  imionism  gained 
enormous  ground.  It  seems  totally  impossible  for  a 
imion  leader,  who  has  brought  himself  into  power 
by  preaching  a  strict  hmitation  of  work,  to  turn  about 
and  preach  that  work  is  necessary.  The  mass  of  the 
workers  will  always  follow  the  man  who  promises 
something  for  nothing.  But  were  the  Whitley  Plan 
a  success,  it  would  undoubtedly  create  grave  dangers. 
The  pubHc  is  not  represented  in  its  councils,  and  each 
industry  would  take  on  the  nature  of  an  immense 
trust  of  workers  and  capital,  and  although  this  im- 
mense power  might  be  exercised  for  good,  it  is  more 
reasonable  to  suppose  that  it  would  not  be,  for  any 
group  of  individuals  given  unrestricted  and  unre- 
viewed  power  usually  gets  drunk  with  that  power. 
Of  course,  Parhament  is  supposed  to  exercise  a  super- 
vision, but  what  can  Parhament  do  against  the  united 
front  of  an  essential  industry?    We  have   seen  in 


COMMON  SENSE  AND  LABOUR      119 

America  the  railroad  employees  terrorize  the  Govern- 
ment. What  would  have  been  their  power  had  the 
railroad  owners  also  united  with  them? 

The  Whitley  Plan  is  presumed  to  construct,  but 
the  machinery  is  essentially  regulatory  and  is  more 
concerned  with  not  doing  than  with  doing.  The 
Whitley  Plan  holds  nothing  for  America  because,  if 
for  no  other  reason,  this  is  a  large  country  in  which 
living  conditions  so  vary  as  to  make  the  uniform 
regulation  of  any  national  industry  neither  feasible 
nor  desirable.  And  again,  trade  unionism  is  not 
particularly  strong  in  the  United  States,  because 
there  is  comparatively  little  class  consciousness  in  the 
workers,  as  has  been  demonstrated  by  the  total  failure 
of  all  sympatheticstrikes.  We  have,  however,  in  this 
country  one  plan  in  analogy  which  offers  an  example 
of  collective  bargaining  with  trade  unionism  on  a  fair 
constructive  basis,  in  which  getting  the  work  done 
and  seeing  that  both  sides  get  a  square  deal  have  a 
more  important  place  than  the  observation  of  rules. 

The  defect  of  trade  unionism  in  a  country  as  large 
as  the  United  States  is  that  national  rules  formulated 
in  any  but  the  most  general  terms  will,  when  applied 
to  a  specific  case,  work  an  injustice  to  both  the  em- 
ployer and  the  employee.     It  is  well  enough  in  theory 


120      COMMON  SENSE  AND  LABOUR 

to  say  that  the  conditions  in  a  trade  should  be  every- 
where alike,  but  we  all  know  that  without  some 
radical  amendments  to  the  laws  of  nature  this  is  im- 
possible. Trade  unionism  in  England,  for  instance, 
always  legalistic,  has  invented  so  many  rules  and 
laws  that,  in  any  given  case,  experts  should  really 
be  called  in  to  determine  the  respective  rights  and 
duties  of  the  employer  and  the  employee.  We  all  know 
that  English  industry  before  the  war  was  being  grad- 
ually buried  under  a  mass  of  union  regulation.  It 
was  quite  general  in  any  district  for  the  employers 
to  unite  in  an  association  and,  through  a  representa- 
tive, to  make  treaties  with  the  various  unions  op- 
erating in  their  shops.  They  had  adopted,  more 
particularly  in  the  engineering  trades,  a  kind  of 
double-barrelled  collective  bargaining  and,  when  you 
consider  that  in  any  one  shop  perhaps  a  dozen  unions 
might  be  at  work,  each  with  its  own  rules  and  operat- 
ing without  regard  to  the  rules  and  rights  of  any  other 
union,  it  is  quite  easy  to  realize  that  the  English 
employer  was  indeed  unhappy.  In  addition  to  all 
of  the  union  rules  and  regulations,  each  shop  also 
contained  a  certain  number  of  unskilled  workers  who 
were  not  organized,  and  who,  according  to  the  unions, 
had  no  rights  on  earth. 


COMMON  SENSE  AND  LABOUR      121 

The  clothing  trade  in  the  United  States  has 
adopted  what,  in  many  respects,  are  the  best  features 
of  the  Whitley  Plan  and  none  of  its  more  dangerous 
ones.  In  the  clothing  trade  the  relation  between  the 
employer  and  the  employee  is  commonly  very  bitter. 
The  workers  are  mostly  foreigners,  many  of  them  do 
not  even  speak  English,  and  they  have  brought  them- 
selves from  the  terrible  sweat-shop  degradation  to 
their  present  position  only  by  dint  of  constant  fight- 
ing. A  not  inconsiderable  portion  of  the  employers  are 
also  former  sweat-shop  workers,  and,  as  is  always  the 
case,  they  give  the  same  treatment  to  their  employees 
as  they  themselves  received  as  workers.  The  Russian 
influence  prevails  in  the  unions  and  they  are  very  radi- 
cal. The  strikes  have  been  long  and  bitter  and  in  the 
City  of  New  York  both  sides  have  often  used  violence. 

The  Chicago  firm  of  Hart,  Schaffner  &  Marx  took 
the  lead  in  bringing  about  a  better  condition.  They 
met  the  problem  squarely;  they  believed  that  the 
unions  and  employers  were  really  competing  for  the 
good  will  of  the  public  and  that,  although  one  might 
alone  gain  it,  it  would  be  better  if  both  had  it  together. 
They  accepted  the  principle  of  unionism  and  of  col- 
lective bargaining,  but  held,  further,  that  a  union 
should  be  recognized  only  as  it  manifested  a  general 


1£2      COMMON  SENSE  AND  LABOUR 

desire  to  fulfill  its  agreements  and  to  better  industry. 
They  thought  that  many  of  the  traditional  principles 
and  practices  of  unionism  had  developed  out  of  a 
state  of  militancy  and  that  this  militancy  would  not 
be  necessary  if  the  employer  changed  his  own  tactics' 
They  thought  an  arbitration  board  within  the  shop 
would,  if  fairly  administered,  settle  most  troubles. 
They  agreed  with  the  union  for  a  board  of  three 
people,  one  to  be  chosen  by  the  union,  another  by 
the  company,  and  these  two  to  elect  a  third.  For  a 
long  tune  the  two  arbitrators  could  not  agree  upon  a 
third  member,  which  turned  out  to  be  no  particular 
misfortune  after  all,  because  it  resulted  in  a  series 
of  compromised  decisions  and  convinced  both  sides 
that  it  was  necessary  to  give  as  well  as  to  take.  A 
third  member  was  eventually  agreed  upon.  The 
closed-shop  issue  is  always  insisted  on  by  unions,  be- 
cause it  gives  the  officials  a  club  with  which  they  can 
recruit  members  and  collect  dues.  No  employer 
willingly  submits  to  the  closed  shop. 

Hart,  Schaffner  &  Marx  worked  out  a  compromise 
known  as  the  preferential  shop.  Under  this  arrange- 
ment  union  members  are  the  first  to  be  taken  on  and 
the  last  to  be  let  go,  and  thus,  while  the  advantage 
in  union  membership  is  retained,  the  rights  of  non- 


COMMON  SENSE  AND  LABOUR      123 

unionists  are  conserved.  Out  of  the  Board  of  Arbitra- 
tion grew  the  present  Labour  Agreement,  which  is 
rather  elaborate.  It  is  among  the  Board  of  Arbitra- 
tion, the  company,  and  the  Amalgamated  Clothing 
Workers  of  America.  The  Board  of  Arbitration  is  the 
final  court.  The  Trade  Board  is  the  Court  of  First 
Instance.  The  latter  consists  of  eleven  members, 
all  of  them  employees  of  the  company,  one  half 
chosen  by  the  company  and  the  other  half  by  the 
union.  The  chairman  is  elected  or  appointed  under 
the  agreement,  and  is  supposed  to  be  representative 
of  both  interests.  The  provisions  of  the  agreement 
are  executed  by  deputies,  each  side  having  its  own 
deputies,  who  may  also  act  as  counsel  in  presenting 
complaints.  In  each  shop  the  union  is  entitled  to 
have  a  duly-accredited  representative  or  agent  and  he 
is  "expected  to  represent  the  cooperative  spirit  of 
the  agreement  in  the  shop  and  be  the  leader  in  pro- 
moting that  spirit  of  amity  and  spirit  of  good  will 
which  it  is  the  purpose  of  this  agreementtoestablish.*' 
The  agreement  defines  a  procedure  for  the  arbitration 
of  all  disputes,  defines  rates  and  hours  during  the 
life  of  the  agreement,  and  also  aflSrms  the  full  powers 
of  discharge  and  discipline  in  the  company  with  an 
appeal  over  to  the  Trade  Board. 


124      COMMON  SENSE  AND  LABOUR 

The  company  has  been  operating  under  such 
agreements  for  nine  years  with  remarkable  success. 
The  agreement  is  not  considered  as  expressing  the 
maximum  of  good  will,  but  rather  as  a  binding  mini- 
mum and  the  company,  through  a  singularly  intelU- 
gent  and  not  at  all  paternal  welfare  department,  has 
gone  far  toward  eliminating  many  of  the  petty  dis- 
putes which  so  often  grow  into  serious  differences. 
The  plan  has  worked  so  well  that  it  has  now  been 
adopted  by  the  employers  and  employees  engaged  in 
the  manufacture  of  men's  clothing  in  New  York, 
Rochester,  Chicago,  and  Baltimore,  proceeding  as  the 
National  and  Industrial  Federation  of  Clothing  Manu- 
facturers. The  larger  plan  has  not  been  in  operation 
long  enough  adequately  to  be  tested,  but  the  whole 
thought  of  the  agreement  is  constructive  and  there 
seems  no  good  reason  why  it  should  not  work.  In 
the  case  of  Hart,  Schaffner  &  Marx,  the  success  would 
seem  to  be  due  to  the  fact  that,  while  every  proper 
facihty  is  given  for  the  fair  adjudication  of  com- 
plaints, the  real  emphasis  is  upon  production.  The 
agreement,  which  is  a  model  of  its  kind,  is  shot 
through  and  through,  not  with  the  abstract  rights  of 
people,  but  with  the  proposition,  phrased  in  various 
ways,  that  the  employer  and  employed  are  associated 


COMMON  SENSE  AND  LABOUR      125 

for  purposes  of  production  and  mutual  profit  and  not 
merely  for  further  discussion.  This  agreement  has 
stood  where  most  agreements  of  the  trades  unions  fail, 
because  this  one  goes  to  production,  while  the  others 
devote  the  primary  attention  to  rules  and  rule  mak- 
ing. This  is  collective  bargaining  with  a  definite  idea 
of  what  is  being  bought  and  sold. 

The  clothing  agreement  is,  in  a  way,  on  the  rep- 
resentative basis.  The  employer  and  the  worker  have 
a  common  forum.  It  differs  from  the  many  represen- 
tative systems  which  are  now  arising  all  over  the 
country  in  that  they  do  not,  as  a  rule,  involve  any 
form  of  contract  with  the  trades  union.  The  American 
employer  cannot  in  fair  conscience  deal  with  the 
trades  union  instead  of  with  his  employees  unless : 

1.  A  majority  of  the  employees  are  members  of 
the  union;  and 

2.  The  union  officers  exercise  a  constructive  control 
over  the  members — that  is,  that  they  can  require 
the  members  to  work  as  well  as  to  strike;  and 

3.  The  union  officers  are  willing  to  concede  that 
the  primary  purpose  for  the  engagement  of  capital 
is  to  augment  itself  and  not  to  offer  itself  for  distribu- 
tion. In  other  words,  a  recognition  that  wages  are 
paid  out  of  production. 


H6      COIVIMON  SENSE  AND  LABOUR 

Since  all  these  factors  ar^  rarely  present  in  any 
attempted  union  bargain,  the  present  trend  is  toward 
company  forums  and  away  from  the  collective  bar- 
gaining with  outside  interests.  The  more  convenient 
method,  assuming  that  wages  are  a  matter  of  bargain 
and  sale,  would  be  for  an  employer  to  deal  with  a 
responsible  imion  on  economic  principles.  Such 
union  supervision  would  immensely  stimulate  broad 
business  thought  and  be  a  great  help  to  industry. 
This  is  quite  aside  from  the  point  as  to  whether  a 
trades  union  answers  any  need  which  a  well-function- 
ing state  cannot  fill. 

But  very  few  union  leaders  have  the  personal  force 
to  put  over  soimd,  economic  thought  with  their  fol- 
lowers. They  can  control  them  only  by  promising 
more  pay  for  less  work,  and  therefore  making  an 
agreement  with  the  average  union  is  not  more  satisfy- 
ing than  naihng  jelly  to  a  wall.  The  aim  of  both 
sides  is  frequently  an  agreement  without  mutuality. 

It  is  in  the  direction  of  having  each  side  appreciate 
the  problems  of  the  other  that  arise  the  real  bene- 
fits to  industry  of  representation.  It  teaches  the 
worker  that  the  processes  of  industry  are  in  no  wise 
mysterious  and  teaches  the  employer  that  the  worker 
is  willing  to  cooperate  if  given  a  fair  chance — all 


COMMON  SENSE  AND  LABOUR      127 

of  which  amounts  to  saying  that  participation  in  the 
problems  of  industry  teaches  both  the  employer  and 
the  employed  that  good  profits  result  not  from  leg- 
erdemain but  from  skilled  production,  marketing,  and 
finance.  One  hears  a  great  deal  about  the  enormous 
benefits  to  be  derived  from  having  in  the  works  some 
kind  of  a  committee,  or  whatever  it  may  be  called,  to 
receive  and  settle  complaints  and  possibly  periodically 
to  present  the  worker's  side  to  the  management.  This 
may  take  any  one  of  many  forms — from  an  elected 
committee  or  committees  to  an  appointed  committee 
of  both  the  management  and  the  men.  But  any 
kind  of  an  industrial  body  organized  solely  to  settle 
disputes  amounts  to  nothing.  Such  a  body  does 
not  touch  the  constructive,  creative  faculty  and  also 
it  does  not  touch  the  reason  for  most  disputes,  which 
is  that  one  side,  or  both,  does  not  understand  how 
profits  are  legitimately  made.  If  you  settle  enough 
disputes  you  may  have  order,  but  you  will  not  have 
progress.  Bearing  this  principle  in  mind,  it  is  not 
surprising  to  discover  that  representation  of  the 
workers  on  the  board  of  directors  of  a  corporation  to 
protect  the  interest  of  labour  is  only  a  sentimental 
arrangement  quite  unproductive  of  results,  and  also 
that  shop  committees  or  bodies  set  up  to  hear  dis- 


128      COMMON  SENSE  AND  LABOUR 

putes  are  remarkably  industrious  in  the  gathering 
of  dispute  material  but  rarely  do  anything  in  the  way 
of  progress,  unless,  peradventure,  they  depart  from 
their  original  conception  and  become  constructive. 

This  is  just  what  happened  at  the  Filene  Store. 
They  started  an  arbitration  board,  but  gradually 
the  employees'  association  became  a  quasi-legislative 
body  and  a  class  for  the  study  of  the  economics  of 
business.  They  early  asked  for  and  received  the 
right  to  inspect  the  books  of  the  corporation,  and  the 
company  was  fortunate  to  have  at  the  time  a  number 
of  employees  who  understood  enough  about  business 
to  translate  these  financial  statements  to  the  people 
involved.  The  success  at  Filene's  is  not  due  to  the 
machinery  of  government,  but  to  the  widespread 
knowledge  among  the  people  employed  of  how  the 
company  makes  money  and  where  the  wages  come 
from.  For  instance,  each  sales  person  has  a  sales  quota, 
which  is  fixed  on  the  amount  of  goods  that  must  be 
sold  in  order  to  pay  the  particular  base  wage  received. 
When  that  wage  has  been  earned,  the  company  and 
the  employee  split  the  amount  charged  as  selling  ex- 
pense in  the  total  of  sales  beyond  the  quota.  Even 
the  most  stupid  girl  grasps  where  her  wages  come 
from — that  they  do  not  come  out  of  the  air! 


COMMON  SENSE  AND  LABOUR      129 

In  the  small  business  with  only  half  a  dozen  or  so 
employees  everybody  knows  how  and  where  the 
wages  come  from.  The  workers  know  that  if  the 
boss  has  no  work  to  do,  they  will  not  get  money, 
and  that  if  they  are  very  slow  in  their  jobs,  the 
boss  will  be  unable  to  compete  on  a  price  basis 
with  some  other  business  that  has  speedier  men. 
It  is  only  when  the  selling  and  the  accounting  are 
very  far  away  from  the  men  on  the  bench  that 
the  work  and  the  wage  lose  connection.  In  the 
moderate-sized  factory  it  is  not  necessary  to  lose 
this  touch. 

Take  this  experience.  The  Irving  Pitt  Company  had 
never  had  a  strike;  they  had  always  paid  as  high  or 
higher  wages  than  were  being  paid  in  the  community; 
they  had  reduced  hours  to  forty -four,  and  generally 
were  on  ?l  fair  basis  with  their  five  hundred  men. 
They  had  an  open  shop,  and  although  they  did  not 
treat  with  the  unions  as  such,  union  and  non-union 
men  were  on  exactly  the  same  basis  in  the  shop. 
Then  came  a  union  organizer  and  forthwith,  and 
without  formulating  any  demands  whatsoever,  the 
men  started  to  walk  out.  The  president  of  the  com- 
pany asked  the  group  what  it  wanted.  Some  did 
not  know;  others  replied,  "more  money." 


130      CO]\IiVION  SENSE  AND  LABOUR 

"How  much  more  money?" 

That  again  was  a  puzzler.  Several  thought  that 
two  dollars  a  week  more  would  be  right,  others  asked 
only  a  dollar  additional,  while  a  few  very  frankly 
stated  that  they  wanted  nothing  in  particular  but 
were  going  to  be  "good  sports"  and  go  out  with  the 
rest  of  the  bunch.  Finally  they  all  decided  that  what 
they  wanted  was  the  right  to  organize. 

"Have  you  made  any  demand  to  organize.'^  Has 
anything  been  refused.^  Have  you  ever  mentioned 
to  any  foreman,  superintendent,  or  any  one  else  in 
authority  that  you  wanted  more  money  .^" 

The  men  had  to  admit  that  they  had  made  no  re- 
quests of  any  kind. 

"I  am  not  opposed  in  principle  to  organized 
labour,"  went  on  the  president,  "but  you  know  as  I 
know  that  the  present  strike  movement  here  has 
nothing  to  do  with  wages  or  hours,  but  what  the 
agitators  are  after  is  to  start  the  class  war.  If  you 
believe  in  the  class  war,  say  so,  and  go  to  it.  Then 
there  is  nothing  for  us  to  adjust.  But  if  it  is  your 
own  affairs  with  which  you  are  concerned,  why  do 
you  not  organize  and  I  will  not  only  deal  with  you 
collectively,  but  I  will  turn  over  to  you  the  decision 
on  every  matter  in  controversy.     You  can  elect  a 


COMMON  SENSE  AND  LABOUR       131 

committee  of  representatives  and  the  company  will 
agree  in  advance  to  do  what  they  decide." 

This  solution,  the  president  later  confessed,  was 
quite  impromptu;  he  had  thought  it  out  while  he  was 
talking  and  he  had  no  details  in  his  head. 

The  men  were  suspicious.  As  usual  they  thought 
that  some  kind  of  a  game  was  being  put  up;  they 
wanted  to  know  when  the  organization  would  start, 
and  generally  they  were  skeptical.  The  president 
on  the  spot  appointed  the  chief  agitator  among  the 
workers  to  go  forward  with  the  plan  and  make  ar- 
rangements for  an  election  that  very  afternoon.  The 
men  elected  twenty  members  all  of  them  from  the 
rank  and  file;  there  were  no  superintendents  or  fore- 
men on  the  board,  but  the  men  agreed  to  have  the 
superintendents,  the  purchasing  agent,  and  the  chief 
planner  sit  with  them,  merely  so  that  they  might 
have  at  hand  complete  and  accurate  information 
from  the  company's  side  on  any  question  that  might 
arise. 

The  board  went  to  work,  it  first  took  up  the  de- 
mand of  the  assembly-room  boys  for  higher  wages — 
those  boys  were  about  to  quit.  The  board  examined 
into  the  facts,  granted  an  increase  to  one  boy,  and 
refused  the  others.    In  the  face  of  a  decision  by  their 


132      COMMON  SENSE  AND  LABOUR 

fellows,  the  boys  took  the  award  and  stayed  at  work. 
During  the  course  of  this  decision  one  of  the  members 
of  the  board  wanted  to  see  the  company's  books. 
That  brought  on  a  discussion.  Another  member 
declared  that  what  the  company  was  making  had 
nothing  to  do  with  the  rate  of  wages.  He  took  the 
ordinary  union  view  that  wages  depended  on  the 
condition  of  the  labour  market,  and  if  the  company 
was  earning  large  profits  and  could  afford  to  pay 
semi-skilled  men  as  much  as  skilled  men  were  receiv- 
ing on  the  outside,  it  would  be  to  the  advantage  of 
the  company  to  hire  only  skilled  men,  for  then  they 
would  get  more  for  their  money.  Considering  the 
question  from  this  angle,  the  board  immediately  de- 
cided that  it  did  not  want  to  see  the  books.  The 
company  did  not  at  any  time  participate  in  this  dis- 
cussion and  it  would  not  have  objected  to  surrender- 
ing the  books. 

The  attitude  of  the  members  of  this  board  is  not 
at  all  an  unusual  one  among  workmen.  The  theo- 
rists and  the  agitators  declaim  loudly  that  the  work- 
ers want  the  profits  of  industry,  and  in  the  same 
breath  they  declare  for  uniform  wages,  which  are  two 
contradictory  proposals,  because  profits  cannot  al- 
ways and  everywhere  be  the  same.     The  average 


COMMON  SENSE  AND  LABOUR      133 

workman,  however,  when  he  gets  down  to  the  specific 
case,  in  which  he  is  himself  involved,  seldom  bothers 
about  profits.  As  a  man  who  has  had  long  experience 
with  labour  puts  it; 

"The  rank  and  file  of  the  workmen  do  not  care 
how  much  you  make,  just  so  long  as  they  are  sure 
that  they  are  getting  theirs.  If  he  has  no  automobile 
he  does  not  object  to  you  having  a  Ford,  but  he  would 
object  to  a  Rolls  Royce.  But  if  he  has  a  Ford  he 
rather  likes  to  see  you  with  a  $5,000  or  $6,000  car, 
while  if  he  can  own,  say,  a  $2,000  car  you  may  buy 
yourself  a  circus  wagon,  if  your  fancy  turns  that  way, 
and  he  will  then  examine  it  not  with  envious,  but 
with  appraising,  eyes." 

This  particular  board,  at  the  outset,  wanted  col- 
lective bargaining,  but  in  practice  they  preferred 
individual  rulings.  Collective  bargaining  is  never 
really  popular,  it  is  a  result  of  the  minority 
will  being  imposed  upon  that  of  the  majority.  A 
man  is  afraid  to  get  up  in  meeting  and  say  that  he 
is  better  than  the  others  and  ought  to  have  more 
money.  A  workman  is  just  like  any  one  else  and 
down  in  his  heart  he  resents  being  compelled  to  ac- 
cept uniformity. 

The  decisions  of  the  board  were  fair.    In  only  one 


134      COMMON  SENSE  AND  LABOUE 

case  did  they  grant  a  request  which  the  company 
would  have  denied.  The  usual  human  nature  crop- 
ped out.  One  of  the  most  prominent  members  of 
the  board  thought  that  his  position  and  influence 
entitled  him  to  more  money  than  he  had  been  getting. 
He  made  a  loud  speech  for  himself,  but  the  board 
refused  him.  In  the  course  of  time  fewer  and  fewer 
disputes  came  before  the  board.  A  tendency  has  de- 
veloped to  settle  out  of  court,  but  the  board  still  meets 
regularly  once  a  month  on  company  time  and  it  is  a 
success.  This  plan  was  not  originated  with  any  idea 
in  mind  of  granting  autonomy  to  the  workers.  It 
was  purely  an  opportunist  remedy,  but  it  has  worked 
extraordinarily  well  in  practice,  which  is  somewhat 
remarkable  because  it  has  few  constructive  features. 
Perhaps  it  works  because  it  is  the  worker's  own  child. 
There  is  a  deal  in  that. 

The  above  is  really  more  a  case  of  personal  contact 
than  of  representation,  but  this  element  of  personal 
contact,  like  everything  else  in  this  wholly  unneces- 
sarily complicated  and  rigmarole-surrounded  problem 
of  capital  and  labour,  is  variously  interpreted.  Per- 
sonal contact  sometimes  connotes  hand-shaking  and 
welfare  work  and  there  are  employment  "experts" 
who  think  so  highly  of  personal  contact  that  they 


COMMON  SENSE  AND  LABOUR      135 

advocate  having  the  executive  periodically  circulate 
through  the  shops  calling  the  workers  by  name.  Since 
most  executives  have  not  the  name-remembering 
capacity  of  a  club  doorkeeper,  the  practice  sometimes 
gives  rise  to  very  amusing  situations  as  some  perverse 
geniuses  get  the  names  badly  shuffled.  To  correct 
this,  it  has  been  seriously  advocated  that  the  man  or 
his  machine  be  tagged  with  the  name  with  which  the 
Lord  blessed  his  family,  or  the  approximation  of  it 
which  the  employment  manager  may  be  able  to  spell, 
and  thereby  permit  the  executive,  unless  he  happens 
to  be  near-sighted,  to  be  friendly  in  exact  nomen- 
clature. This  interesting  mental  exercise  has,  of 
course,  nothing  to  do  with  the  labour  problem.  The 
most  it  can  do  is  to  establish  a  kind  of  acquaintance- 
ship and  it  neglects  the  fact  that  the  employee  may 
not  always  consider  the  executive  worth  knowing. 
There  are  two  sides  to  being  "friendly." 

The  next  stage  of  industrial  representation  is  the 
purely  constructive,  in  which  capital  and  labour 
meet  not  as  partners  but  as  persons  anxious  to  make 
all  that  they  can  out  of  the  same  general  opportunity. 
Some  splendid  results  have  here  been  accomplished. 


CHAPTER  SIX 

WHEN  THEY  GET  TOGETHER 

Giving  the  workers  a  voice  in  the  management,  as 
I  have  previously  shown,  of  itself  amoimts  to  nothing 
at  all.  As  far  as  the  workers  are  concerned  in- 
dustrial representation  is  of  value  in  the  degree  that 
it  makes  them  familiar  with  the  processes  of  the  busi- 
ness and  incites  the  creative  instinct.  If  it  does 
not  accomplish  these  results,  if  it  does  not  give  them 
an  intimate  familiarity  with  and  interest  in  the  busi- 
ness, the  right  to  have  a  say  is  not  more  valuable 
than  a  Cooper  Union  free-for-all. 

A  second  and  quite  unadvertised  side  of  represen- 
tation, which  is  quite  as  important  as  that  touching 
the  employees,  is  that  to  be  of  greatest  eflBcacy  it 
must  also  teach  the  employer  something  about  the 
adventure  in  which  he  is  engaged — that  is,  cause  him 
to  look  at  the  business  itself  and  not  merely  at  the 
bank  account. 

Representation  is  a  blow  at  managerial  incom- 
petency.    If  the  men  get  thoroughly  on  their  jobs 

1S6 


COIVIMON  SENSE  AND  LABOUR      137 

so  also  must  the  managers,  and  although  it  is  popu- 
lar to  assume  that  the  employer  is  always  right 
and  the  worker  always  wrong,  such  is  by  no  means 
the  truth,  and  the  more  quickly  we  recognize  this 
fact  the  more  quickly  we  shall  attain  that  well- 
balanced  industrial  condition  to  which  efficient  pro- 
duction is  a  natural  sequence.  Just  as  that  worker 
who  is  loudest  in  declaiming  his  rights  is  commonly 
the  poorest  worker,  so  also  that  employer  who  is  per- 
fectly certain  of  the  strength  of  his  position  is  com- 
monly the  poorest  employer.  The  right  kind  of  rep- 
resentation will  cause  not  only  a  far  more  efficient 
working  force  but  also  a  far  more  efficient  managing 
force,  and  the  two  in  conjunction  will  make  good 
business. 

When  we  find  that  a  plan  of  industrial  representa- 
tion which  gives  a  free  forum  to  the  workers  does  not 
function  we  can  be  perfectly  certain  of  one  of  two 
things — that  either  the  representatives  have  not 
been  furnished  by  the  management  with  all  the  busi- 
ness facts  or  that  the  management  itself  is  not  cap- 
able. Where  the  workers  transform  a  representative 
system  into  a  society  to  increase  wages  you  can  take 
for  granted  without  investigation  that  no  sincere 
and  straightforward  attempt  has  been  made  to  let 


138      COMMON  SENSE  AND  LABOUR 

them  ascertain  how  the  business  is  conducted,  and 
also  you  may  take  for  granted  that  when  a  manage- 
ment does  refuse  to  permit  workmen  to  know  facts 
and  figures,  it  either  does  not  know  the  facts  and 
figures  itself,  or  someone  in  the  management  is  doing 
something  which  he  should  not  do. 

The  workman  is  made  of  exactly  the  same  stuff  as 
the  employer  and  when  he  and  his  fellows  ask  for  im- 
possible wages  and  hours  they  are  only  following  the 
lead  of  those  employers  who  get  together  and 
agree  to  limit  production  in  order  to  maintain 
high  prices.  Wherever  you  go  in  this  employer  and 
employee  relation  you  find  that  the  employee,  when 
he  gets  a  measure  of  irresponsible  power,  starts  out 
to  do  exactly  what  the  employer  used  to  do  when  he, 
too,  suffered  from  the  delusion  that  he  had  a  power, 
the  use  of  which  did  not  have  to  be  accounted  for  to 
the  public.  The  strong  point  in  industrial  represen- 
tation is  that  neither  the  employer  nor  the  employee 
will  be  foolish  enough  to  do  anything  which  will  not 
stand  the  light.  Both  inevitably  realize  not  only  their 
responsibility  to  each  other  but  to  the  public.  They 
have  to  practise  open  diplomacy  that  is  really  open. 

And  so,  working  together  with  a  clear  knowledge 
of  what  business  is,  the  impossible  often  becomes 


COMMON  SENSE  AND  LABOUR      139 

easy.  That  which  is  to-day  generally  called  "im- 
possible" is  for  a  manufacturer  to  keep  pace  with 
rising  wage  and  material  costs  without  passing  the 
increases  on  to  the  consumer.  Everywhere  one 
hears  that  it  is  "impossible"  to  have  lower  prices 
imtil  the  workers  consent  to  do  more  work  and  take 
less  money.  It  is  true  that  workmen  are  doing  very 
little  work,  doing  it  without  intelligence,  and  asking 
a  lot  of  money  for  it,  but  the  career  of  the  White 
Motor  Company  suggests  that  perhaps  some  of 
these  "impossibilities"  are  mental  rather  than  physi- 
cal. 

At  the  White  Company  in  Cleveland  service  has 
outstripped  wage,  with  the  very  remarkable  conse- 
quence that,  although  materials  have  increased  50 
per  cent.-  and  wages  110  per  cent,  since  1914,  the 
company  has  found  it  necessary  to  increase  the  cost 
of  the  finished  product  to  the  consumer  by  only 
10  per  cent.  The  net  increase  in  manufacturing 
cost  is  only  7  per  cent.     This  is  an  unequalled  record. 

The  makers  of  typewriters  have  not  found  it  neces- 
sary to  increase  their  price  to  the  public  because  they 
have  cut  down  selling  expenses,  but  their  manufac- 
turing costs  are  actually  very  much  greater  than  be- 
fore the  war  and  there  has  been  no  marked  increase 


140      COMMON  SENSE  AND  LABOUR 

in  building  efficiency.  The  demand  for  machines 
has,  however,  been  so  enormous  that  it  has  been  pos- 
sible, in  spite  of  very  high  wages  and  in  spite  of  the 
high  cost  of  materials,  to  sell  more  machines  than 
ever  before  and  therefore  to  take  smaller  profits  per 
machine.  Selling  more  machines,  the  profits  are 
greater  than  ever  before. 

The  White  Company  has  made  its  record  through 
straight  manufacturing  efficiency.  The  average 
wage  to-day  based  on  51  weeks'  work  is  $32.34  as 
against  $14.04  in  1910  and  $15.03  in  1914.  The 
factory  value  of  the  product  for  1919  is  $33,500,000 
as  against  somewhat  less  than  $4,000,000  in  1910  and 
about  $9,000,000  in  1914. 

In  the  White  Company  the  selling  side  is  not 
important,  for  at  the  present  time  it  is  not  necessary 
really  to  sell  first-class  motor  trucks.  It  is  more  a 
question  of  being  able  to  deliver  them. 

Hand  in  hand  and  as  a  part  of  the  remarkable 
record  in  efficiency,  this  company  has  achieved  just 
as  remarkable  a  record  in  the  holding  of  its  men. 
Cleveland  is  what  is  known  as  a  labour  centre  in  that 
there  are  a  very  large  number  of  factories  located  in 
the  district.  During  the  war  it  was  a  paradise  for 
the  man  who  liked  to  hire  himself  from  day  to  day 


# 


COMMON  SENSE  AND  LABOUR      141 

to  the  highest  bidder.  Every  possible  inducement 
is  present  for  machine-gun-like  hiring  and  firing. 
The  average  turnover  of  labour,  that  is  the  number 
of  men  hired  in  comparison  with  the  total  number 
employed,  was  300  per  cent,  during  the  war.  The 
average  of  the  White  Motor  Company  for  1917  was 
74  per  cent,  and  for  1918  was  62  per  cent.,  which 
includes  the  withdrawals  by  draft  or  enlistment 
amounting  to  8.75  per  cent.  The  largest  month 
during  these  two  years  had  9.2  per  cent.,  in  September, 

1917,  and  the  lowest  had  2.6  per  cent.,  in  January, 

1918.  For  the  year  1919  the  lowest  monthly  per- 
centage was  1.23  and  the  highest  2,65.  When  you 
consider  that,  the  country  over,  it  seems  almost 
impossible  to  get  a  day's  work  for  a  day's  pay,  and 
that  men  consent  to  be  hired  apparently  only  for 
the  purpose  of  ascertaining  what  the  job  is  like,  which 
curiosity  is  very  quickly  satisfied,  the  example  of 
the  White  Company  is  worthy  of  the  closest  study 
and  holds  many  lessons  for  those  who  would  solve 
the  problem  of  industry  by  resounding  formulae. 

The  remarkable  success  is  not  due  to  trick  or  magic 
but  to  the  firm  grasping  by  everyone  of  the  cardinal 
principle  of  our  economic  life,  and  that  is  that  wealth, 
whether  in  the  form  of  wages  or  profits,  comes  from 


142       COMMON  SENSE  AND  LABOUR 

only  one  source;  production.  ,  The  people  know  why 
they  work.  Thus  every  adjustment  has  been  com- 
paratively easy. 

But  it  may  be  said  right  here  that  this  principle, 
now  amounting  to  a  conviction,  did  not  grow  of  itself, 
but  is  the  result  of  extremely  intelligent,  fair-minded 
management  which  involves  a  complete  exposition 
of  all  of  the  financial  and  other  workings  of  the  com- 
pany to  the  people  in  mass  through  well-phrased 
editorial  work  and  a  complete  representative  sys- 
tem with  a  representative  for  each  ten  employees. 
There  is  absolutely  no  paternalism  and  no  aloofness, 
but  instead  a  complete  readiness  to  meet  any  radical 
argument  on  its  own  ground  with  facts  and  figures. 
It  is  what  might  be  called  an  un-union  shop  in  that 
there  is  no  discrimination  against  trade  unions,  but 
there  are  many  union  men  employed,  and  in  fact  the 
presidents  of  several  of  the  local  unions  have  been 
shop-committee  chairmen.  One  of  the  employment 
oflScers  is  a  former  union  labour  leader  of  Cleveland, 
and  the  executive  officers  are  to  quite  a  considerable 
degree  believers  in  many  of  the  principles  of  social- 
ism and  even  of  Marx  sociahsm.  They  are  wholly 
against  absentee  ownership,  in  favour  of  corporate 
form  of  enterprise,  and  look  forward  to  the  day  when 


COMMON  SENSE  AND  LABOUR      143 

the  worker,  learning  the  advantage  of  thrift,  will  con- 
trol industry  by  buying  himself  into  it. 

The  average  employer  is  not  sufficiently  acquainted 
with  economic  principles  to  answer  a  good  radical 
agitator  on  his  own  ground.  The  active  managers 
of  this  company  in  contact  with  the  workers  could 
all  be  persuasive  radical  agitators  were  they  only  less 
sufficiently  informed  on  the  processes  of  industry. 
They  are  not  trades  unionists  because  they  know  that 
a  man  cannot  fly  by  tugging  at  his  boot  straps,  that 
is,  by  continually  asking  for  more  in  return  for  less. 
They  are  not  state  sociahsts  because  they  are  very 
much  inclined  to  doubt  that  the  wisdom  of  the  state 
is  infii^ite,  and  they  are  not  Bolshevists  because  they 
think  that  the  road  to  freedom  is  through  work.  Al- 
together they  are  a  very  remarkable  collection  of 
true  liberals,  their  outstanding  distinction  from  most 
Hberals  being  that  they  know  what  they  are  talking 
about  and  do  not  merely  follow  phrases. 

Let  us  see  how  all  of  this  came  about.  In  1914, 
when  the  war  began,  the  managers  instantly  realized 
that  if  the  war  continued  through  any  great  length  of 
time  there  would  be  a  world-wide  inflation  of  cur- 
rency and  that  the  buying  power  of  money  would 
rapidly  shrink.     They  examined  into  the  effects  of 


144      COMMON  SENSE  AND  LABOUR 

past  wars  and  they  decided  to- organize  to  meet  con- 
ditions. They  did  not  organize  all  at  once,  they  did 
not  take  Bottle  999  off  the  shelf  and  swallow  its 
entire  contents  with  the  expectation  of  being  there- 
after fortified  against  all  industrial  disease.  Instead 
they  felt  that  the  surest  way  to  attain  the  end  they 
sought  was  to  spread  economic  knowledge — to  let 
the  workers  go  forward  with  them  in  the  study  of 
conditions,  so  that  instead  of  an  antagonistic  body 
they  would  have  a  cooperative  body. 

They  finally  achieved  this  through  the  organiza- 
tion of  shop  committees  with  the  object  of  bringing 
about  a  closer  relationship  between  the  management 
and  its  employees  and  increasing  the  confidence  of 
each  in  the  other  through  an  educational  programme 
arranged  to  develop  a  better  understanding  of  the 
common  problems.  Each  department  is  divided 
into  groups  of  about  ten  men  and  a  representative 
elected  by  each  group  by  secret  ballot.  These  form 
a  Department  Committee.  These  committees  elect 
their  own  chairmen  and  secretaries  and  hold  meetings 
every  other  week  on  company  time,  and  at  these 
meetings  the  superintendents  and  other  supervisors 
may  attend,  but  they  are  not  members  and  are  per- 
mitted to  speak  only  on  invitation.     That  is  all  the 


COMMON  SENSE  AND  LABOUR      145 

organization  there  is;  the  rest  is  left  to  the  committees 
themselves. 

They  have  no  rules  as  to  what  they  shall  do  and 
what  they  shall  not  do.  The  forums  are  wide  open 
for  the  discussion  of  the  business.  In  charts  and 
figures  the  meetings  have  before  them  every  financial 
and  other  activity  of  the  company.  There  is  nothing 
the  men  cannot  investigate  if  they  want  to.  They 
can  and  do  make  recommendations  of  various  sorts, 
but  the  big  thing  that  these  committees  have  done 
is  to  grasp  what  production  means  and  what  capital 
does  and  thus  thoroughly  to  comprehend  the  policy 
of  the  company.  The  company  does  not  believe 
that  it  is  possible  to  overproduce.  Neither  do  the 
men  now.  They  say  with  economic  exactness  that 
"the  term  (over-production)  is  merely  a  negative 
expression  of  the  phenomenon  of  under-production. 
Production  means  the  creation  of  wealth.  Without 
production  a  company  will  be  without  wealth  and  so 
will  experience  depression  due  to  under-consumption." 
That  knocks  out  the  familiar  argument  that  over- 
production spells  idleness  for  the  worker.  The 
company  has  planned  and  has  to  date  carried  through 
a  logical  programme  of  annual  expansion  and,  by 
putting  the  cards  on  the  table,  has  demonstrated 


146      COMMON  SENSE  AND  LABOUR 

thoroughly  to  the  men  that  the  highest  possible  wage 
can  be  paid  only  when  the  highest  possible  produc- 
tion is  attained.  This  is  graphically  illustrated  by 
showing  that  the  larger  the  concern  and  the  higher 
the  per-man  production,  the  higher  will  be  wages, 
not  merely  in  dollars,  but  in  actual  buying  power. 

All  of  these  committee  meetings  have  before  them 
estimates  of  the  buying  power  of  the  dollar.  Taking 
the  buying  power  of  the  dollar  in  1914  as  a  unit:  they 
estimate  a  decrease  of  one  half  for  1919 — that  is,  a 
dollar  of  1914  is  worth  fifty  cents  to-day.  The  chart 
shows  that  in  1914  the  production  of  the  company  was 
valued  at  $9,023,172.  They  had  2,202  workmen  on 
an  average  who  received  an  average  weekly  wage 
of  $15.03  and  a  total  wage  of  $1,688,467.  For 
1919  there  is  an  estimated  production  of  $33,500,000 
with  the  average  number  of  men  5,500  and  the  aver- 
age wage  of  $32.44,  making  a  total  wage  of  $9,000,000. 
This,  reduced  to  a  graphic,  shows  that  the  value  of 
the  product  has  increased  in  a  greater  proportion 
than  the  average  number  of  men  employed  and,  that 
with  the  larger  production,  the  wages  have  not  only 
more  than  doubled  as  expressed  in  dollars  over  1914, 
but  translating  the  1919  wage  of  $32.44  mto  1914 
dollars,  the  wage  to-day  would  be  $16.22  as  against 


^ 


COMMON  SENSE  AND  LABOUR       147 

$15.03,  which  represents  in  five  years  an  absolute 
increase  of  $1.19.  This  does  not  seem  to  be  a  very 
large  increase  in  these  days  of  enormous  dollar  values, 
but  it  takes  on  a  different  light  when  it  is  considered 
that  in  this  same  company  the  wages  declined  from 
$14.04  in  1910  to  $12.82  in  1911  and  rose  again  in 
1914  to  $15.03.  The  actual  increase  is  really  greater 
than  $1.19  because  the  1919  dollar  is  worth  more  than 
fifty  cents  as  compared  with  the  1914  dollar. 

Through  such  methods  as  these  and  through  dis- 
cussions from  every  possible  angle  the  entire  person- 
nel realizes  fully  the  company's  policy — which  is 
essentially  this: 

"Production  is  the  greatest  essential  in  a  factory. 
For  the  whole  commimity  to  maintain  a  comfortable 
and  humane  standard  of  hving  it  is  necessary  for 
every  man  in  the  community  to  produce  consistently, 
otherwise  there  will  not  be  enough  wealth  to  go 
around.  The  generally  accepted  idea  and  fear  of 
over-production  is  at  bottom  unsound  and  should  not 
enter  inta  the  policy  of  either  management  or  em- 
ployees. There  really  can  be  no  such  thing  as  over- 
production in  industry. 

"Production  must  first  be  arranged  consistently 
with  plant  investment,  inventories,  and  personnel. 


148      COMMON  SENSE  AND  LABOUR 

They  must  be  well  balanced  to  attain  maximum  re- 
sults for  employees  and  management.  Such  activi- 
ties as  purchasing,  stores,  inventories,  cost  systems, 
maintenance,  and  plant  repairs,  over  which  produc- 
tive labour  has  no  control  and  in  the  opinion  of  the 
management  has  no  desire  to  be  bothered  with,  are 
arranged  to  keep  production  standards  at  a  maximum. 
In  this  way  it  is  made  possible  to  earn  the  greatest 
amount  with  least  exertion  and  to  build  up  a  secure 
future  for  the  employees  in  the  factory. 

"After  the  proper  organization  is  estabhshed  and 
maximum  production  arranged  for,  the  first  and  most 
important  consideration  is  'Labour.' 

"The  highest  possible  wage  on  a  straight  time 
basis  without  bonuses,  premiums,  or  'profit-sharing' 
is  paid  to  employees.  The  factors  instrumental  in 
establishing  the  wage  scale  are  cost  of  living  and 
amount  of  production.  It  is  the  policy  of  the  man- 
agement always  to  study  the  future  from  all  angles, 
and  make  the  White  Motor  Company  a  safe  work- 
shop, and  a  part  of  every  employee's  home." 

They  bring  everything  down  to  the  man — for 
instance,  the  company  sets  aside  a  special  fund  from 
production  to  cover  the  hospital,  the  losses  in  the 
factory  kitchen  and  restaurant,  time  paid  to  em- 


COMMON  SENSE  AND  LABOUR      149 

ployees  for  jury  service,  time  paid  to  employees  in 
registration,  medical  service,  amusements,  and  the 
expense  of  publishing  and  sending  the  company's 
monthly  magazine  to  each  of  the  employees.  The 
total  of  these  expenditures  for  1918  was  $127,720.93. 
These  expenditures  are  charted  and  reduced  to  the 
average  cost  per  man  per  month,  week,  and  day. 
They  amount  to  eight  cents  a  day  per  man  and  thus 
every  vestige  of  paternalism  is  removed  by  the  con- 
clusive demonstration  that  these  expenditures  are 
paid  for  out  of  production  to  the  end  that  production 
may  be  bettered.  They  thus  rightly  appear  as  a 
community  effort  and  not  as  company  benefaction. 
There  are  many  other  points  of  interest  in  the 
operations.  The  employment  oflBce  tries  to  hire 
employees  of  all  creeds  and  nationalities,  so  mixing 
them  up  that  there  can  be  no  sections  or  factions. 
They  will  not  take  men  who  have  not  at  least  applied 
for  their  first  papers,  and  they  prefer  married  men 
beyond  thirty  to  single  men.  But  over  and  above 
all  is  the  great  principle  of  the  organization  spread 
through  representation  and  able  management  that 
the  progress  of  the  company  is  the  employee's  prog- 
ress because  only  out  of  greater  and  greater  produc- 
tion can  higher  and  higher  wages  be  paid. 


150      COMMON  SENSE  AND  LABOUR 

It  follows  as  of  course  that  this  production  must  be 
good  production  and  therefore  the  creative  instinct  is 
stimulated. 

It  is  almost  needless  to  say  that  under  these  condi- 
tions it  would  not  be  possible  for  an  inefficient  execu- 
tive to  hold  his  job  or  to  administer  his  job  by  absent 
treatment.  Essentially  this  whole  plan  may  be  re- 
lated back  to  the  same  principles  that  hold  in  the 
Disston,  the  Baldwin,  and  the  Endicott-Johnson 
plants,  but  with  the  difference  that  where  the  re- 
sults in  those  cases  are  in  a  sense  unconscious  the 
results  in  the  White  Company  are  due  to  conscious 
effort. 

An  almost  equally  remarkable  record,  attained  by 
quite  a  different  mode,  is  that  of  the  American  Roll- 
ing Mill  Company  at  IMiddletown,  Ohio.  This  com- 
pany employs  some  five  thousand  people,  has  been 
operating  about  twenty  years,  and  has  not  only  never 
had  a  strike,  but  also  since  the  Armistice  the  per-man 
production  has  not  dropped.  The  usual  storj^  of  dis- 
organized, dissatisfied  men  is  notably  absent,  and 
also  there  is  notably  absent  any  elaborate  machinery 
for  the  preservation  of  what  is  called  "industrial 
peace." 

The  company  operates  two  plants  at  Middletown, 


COMMON  SENSE  AND  LABOUR       151 

Ohio,  a  blast  furnace  at  Columbus,  a  works  at  Zanes- 
ville,  coal  mines  in  West  Virginia,  and  ore  mines  in 
the  Lake  Superior  district.  What  is  said  about  the 
plant  at  Middletown  applies  with  equal  force  to  all 
of  the  other  plants  of  the  corporation.  As  George 
M.  Verity,  the  president,  stated  to  me  in  the  midst 
of  the  steel  strike: 

"We  know  of  this  strike  only  through  the  news- 
papers. I  am  interested  in  it  and  the  men  are  in- 
terested in  it,  but  not  in  any  very  personal  way  and 
not  at  all  in  so  far  as  it  concerns  our  own  affairs." 

The  company  has  no  formal  system  of  represen- 
tation and  it  has  not  felt  the  need  for  any.  Mr. 
Verity  is  a  big,  broad  man  and  he  has  filled  the  whole 
organization  with  the  idea  that  everyone  from  the  top 
down  should  regulate  his  every  action  in,  as  he  ex- 
presses it,  "a  spirit  of  fairness,  a  square  deal  always 
both  in  theory  and  practice;  a  big,  broad  view  of 
every  problem,  cutting  out  all  narrowness  and  little- 
ness; a  spirit  of  unselfishness,  of  loyalty,  and  of  cour- 
tesy to  and  consideration  for  the  other  fellow." 

These  are  fine  words,  but  fine  words  butter  no 
parsnips.  Mr.  Verity  does  the  buttering  by  being 
eternally  at  his  desk.  He  lives  in  Middletown  and 
he  and  his  associates  both  in  Middletown  and  in  the 


152      COMMON  SENSE  AND  LABOUR 

other  plants  are  continually  among  the  men  per- 
sonally and  meeting  with  them  in  group  affairs  so 
that  the  relation  of  even  a  labourer  to  the  company 
never  becomes  a  coldly  impersonal  affair.  Further, 
some  twenty-four  men  are  appointed  throughout 
the  various  departments  and  charged  with  the  duty 
of  seeing  that  the  company  policy  is  kept  alive  as  a 
fact.  Mr.  Verity  thinks  of  these  men  as  spokes  in  a 
great  business  wheel  of  which  he  is  the  hub.  Every  one 
of  them  wears  a  gold  seal  company  ring  and  it  is  their 
duty  to  see  that  every  complaint  or  every  possibility 
of  a  complaint  is  instantly  attended  to. 

The  career  of  this  company  emphasizes  the  fact 
that  it  is  not  the  machinery  of  control  that  mat- 
ters in  the  industrial  relation,  but  the  essential  re- 
sults that  may  be  obtained.  If  the  results  can  be 
obtained  without  elaborate  organization  so  much 
the  better. 

The  Midvale  Steel  and  Ordnance  Company,  in 
spite  of  its  size,  has  not  lost  the  personal  element. 
Here  again  we  find  not  so  much  a  system  as  a  man, 
and  that  man  is  William  B.  Dickson,  the  chairman 
of  the  board  and  vice-president  of  the  company. 
His  view  is  expressed  wholly  in  the  famous  answer 
which  Mr.  Carnegie  gave  when  asked,  "Which  is 


COMMON  SENSE  AND  LABOUR      153 

the  most  important  factor  in  business — labour, 
capital,  or  management?" — "Which  is  the  most 
important  leg  of  a  three-legged  stool?" 

In  1918  the  company  posted  a  notice  stating  that 
it  recognized  that  the  prosperity  of  the  corporation 
was  a  joint  affair  of  the  company  and  its  employees, 
that  the  wage  earners  had  the  right  to  bargain  col- 
lectively, and  suggested  that  in  order  to  attain  these 
ends  the  employees  of  the  various  departments  elect 
representatives.  These  representatives  elected  from 
themselves  a  committee  to  confer  with  the  officers  of 
the  company.  They  evolved  a  plan  providing  for  a 
representative  for  each  300  employees,  the  only 
qualification  for  a  representative  being  that  he  should 
have  been  in  the  employ  of  the  company  at  least  a 
year.  These  are  known  as  Division  Representatives 
and  they  elect  a  Plant  Conference  Committee  con- 
taining one  representative  for  each  3,000  employees. 

The  plan  has  worked.  Its  rules  are  not  elaborate, 
and  although  a  cursory  examination  might  lead  to 
the  inference  that  the  representatives  were  primarily 
elected  to  form  a  complaint  and  arbitration  board, 
the  real  thought  behind  the  plan  is  to  spread  a  knowl- 
edge of  how  the  business  is  conducted  and  to  let  the 
men  in  on  the  problems  of  management  in  a  construe- 


154      COMMON  SENSE  AND  LABOUR 

tive  way.  The  arbitration^  machinery  is  so  well 
rounded  and  comprehensive  that  there  cannot  be 
an  imadjudicated  grievance,  but  the  driving  force 
comes  from  the  fact  that  Mr.  Dickson,  who  started 
as  a  workman  and  has  risen  through  the  ranks,  has 
thoroughly  sold  to  the  people  the  idea  that  he  wants 
them  to  help  in  making  a  better  company. 

That  the  employees  have  not  only  recognized  but 
accepted  their  responsibility  could  not  be  better 
shown  than  their  announcement  after  the  meeting 
of  the  American  Federation  of  Labour  at  Atlantic 
City,  in  which  among  other  things  the  six-hour  day 
was  endorsed  and  the  project  for  the  unionization 
of  steel  companies  launched.  They  passed  a  resolu- 
tion which  contained  these  words: 

The  persistent  and  unceasing  demand  of  workmen  employed 
in  all  classes  and  kinds  of  industries  for  a  shorter  day's  work  and 
an  increased  wage  in  order  to  meet  the  present  high  cost  of  living 
is  uneconomic  and  unwise  and  should  not  be  encouraged. 

No  plan  of  representation  is  automatic — the  people 
have  to  cooperate,  and  that  they  will  not  do  until 
they  are  convinced  that  no  trick  is  intended. 

I  know  of  no  case  in  which  the  workers  have  asked 
for  or  initiated  any  form  of  industrial  representation. 


COMMON  SENSE  AND  LABOUR       155 

or  have  received  the  representation  otherwise  than 
with  suspicion.  Workers  do  not  yearn  for  democracy ; 
they  commonly  know  nothing  whatsoever  of  the 
processes  of  industry  and  always  they  will  more 
readily  receive  an  untruth  than  a  truth.  There  is 
nothing  strange  about  this.  They  have  been  firmly 
grounded  in  the  notion  that  the  employer  will  cheat 
them  if  he  can,  in  which  view  they  are  more  often 
right  than  wrong.  The  excessive  demands  of  work- 
ers engaged  in  the  building  industry,  for  instance, 
are  due  to  the  fact  that  before  they  were  organized 
they  were  given  just  as  little  money  as  it  was  possible 
to  give  them.  The  general  contractor  made  his 
money  by  what  is  known  as  "skinning"  the  sub- 
contractors, the  sub-contractor  made  his  profit  by  in 
turn  skinning  the  workmen  whom  he  employed  and 
the  dealers  from  whom  he  bought  materials,  and  so 
it  went  all  down  the  line.  It  used  to  be  a  very  com- 
mon practice  for  employers  to  pay  their  men  in 
cheques  and  if  the  work  were  in  a  sparsely  settled 
district  to  arrange  with  saloons  to  cash  these  cheques 
only  at  a  discount  of  anywhere  from  10  per  cent,  to 
SO  per  cent.  It  was  not  uncommon  to  take  a  construc- 
tion gang  out  into  the  wilds  where  there  was  no  trans- 
portation, under  the  promise  of  high  wages,  pay  these 


156      COMMON  SENSE  AND  LABOUR 

wages  for  a  time  in  cheques  ,which  the  men  could  not 
cash,  and  then  discharge  all  of  them  without  provid- 
ing means  by  which  they  might  get  home.  The 
contractors,  having  the  men  in  this  position,  would 
then  offer  to  hire  them  back  at  low  wages.  It  serves 
no  good  purpose  to  recount  all  of  this  stuff  excepting 
to  bring  to  mind  that  it  is  perfectly  natural  and  per- 
fectly imderstandable  for  workers  in  the  ascendency 
to  act  as  the  employers  did  when  they  were  in  the 
ascendency.  And  the  good  employer  must  suffer 
with  the  bad.  It  is  not,  therefore,  remarkable  that 
the  attempts  to  get  upon  a  fairer  basis,  when  initi- 
ated by  the  employer,  are  received  with  suspicion  by 
the  employees.  We  have  only  to  try  to  picture  what 
would  have  happened  to  a  group  of  employees  who, 
in  the  old  days  when  the  supply  of  labour  was  greater 
than  the  demand,  would  have  approached  their  em- 
ployer with  the  suggestion  for  a  shop  committee  or 
for  any  kind  of  a  workers'  body  to  legislate  upon  con- 
ditions in  the  shop.  It  is  a  remarkable  tribute  to 
the  fundamental  fairness  of  the  average  man,  to  the 
fundamental  fairness  of  the  American  worker,  that 
he  receives  every  clear-cut  plan  for  industrial  repre- 
sentation with  far  better  grace  than  the  employer 
would  have  received  such  suggestions. 


COMMON  SENSE  AND  LABOUR      157 

The  plain  fact  is  that  most  representative  plans  are 
received  and  put  into  operation  by  employers  with 
the  utmost  reluctance  and  only  through  neces- 
sity— which  is  a  cause  for  gratitude  since  any  ar- 
rangement arrived  at  from  other  than  economic 
necessity  is  bound  to  fail.  A  general  benevolence 
toward  humanity  is  either  a  professional  asset  or  a 
recreation.  The  strength  of  the  best  of  the  plans 
is  that,  omitting  the  gestures,  they  have  been  adopted 
through  reasons  of  necessity.  There  are  a  number  of 
these  plans.  Some  of  them  are  heralded  as  panaceas 
and  a  few  of  them  are  not  heralded  at  all.  None 
of  them  is  a  panacea  and  the  patient  is  not  instantly  a 
new  man  after  taking. 

The  most  interesting  plan  of  general  application 
with  specific  changes  for  the  case  in  hand  is  what  is 
called  not  very  accurately  "Industrial  Democracy," 
as  very  successfully  promulgated  by  John  Leitch. 
Under  this  plan  the  workmen  are  represented  in  a  body 
called  the  House  of  Representatives  composed  ex- 
clusively of  workmen  elected  by  the  various  depart- 
ments, the  elections  being  by  secret  ballot  and  the 
number  of  representatives  varying  according  to  the 
size  of  the  plant.  This  body  is  organized  essentially 
along  the  lines  of  the  lower  house  in  auy  bicameral 


158      COIVEVION  SENSE  AND  LABOUR 

system  of  government.  It  has  committees  on  vari- 
ous subjects  connected  with  those  affairs  that  touch 
the  workmen  and  inckiding  committees  to  receive 
complaints  upon  wage  matters,  and  other  special  or 
standing  committees  to  deal  with  improvements  in 
production.  The  thought  behind  this  body  is  that 
it  will  discuss  the  plant  conditions  with  a  view  to 
making  betterments,  these  betterments  being  in- 
stantly reflected  in  the  pocketbook  by  a  wage  divi- 
dend which  is  based  upon  economies  of  operation. 
If  some  improvement  is  introduced  by  which  a  thou- 
sand dollars  is  cut  out  of  the  month's  production 
costs,  that  sum  is  divided  in  equal  parts  between  the 
company  and  the  men,  the  share  of  the  men  being 
given  separately  to  each  of  them  as  a  percentage 
dividend  upon  his  wages. 

It  is  the  experience  of  practically  all  of  those  who 
have  had  to  do  with  the  enlisting  of  the  cooperation 
of  labour  that  although  money  will  not  induce  cooper- 
tion,  money  given  as  a  result  of  cooperation  and 
directly  related  to  the  thing  done  is  a  feature  which 
cannot  be  neglected. 

In  addition  to  the  House  of  Representatives  is  a 
body  known  as  a  Senate  which  is  composed  ex-officio 
of  foremen,  managers,  and  department  heads.     Its 


COMMON  SENSE  AND  LABOUR      159 

powers  are  coordinate  with  and  equal  to  those  of  the 
House  of  Representatives  and  these  two  bodies  func- 
tion together  in  much  the  same  way  as  do  the  House 
and  the  Senate  in  our  national  government,  that  is, 
either  may  initiate  legislation,  but  any  enactment  by 
the  one  must  be  introduced  and  passed  by  the  other. 
To  facihtate  legislation,  provision  is  made  for  the 
appointment  of  joint  committees  to  iron  out  differ- 
ences and  for  joint  sittings  where  necessary. 

When  any  bill  has  been  passed  by  both  bodies  it 
goes  -forward  to  what  is  known  as  the  Cabinet,  which 
is  composed  of  the  executive  officers  of  the  company. 
The  Cabinet  has  the  final  power  of  veto;  without 
its  approval  an  act  does  not  go  into  force.  An- 
other credit  mark  is  added  to  the  essentially  com- 
mon-sense record  of  the  American  worker  by  the 
fact  that  in  the  fifteen  or  twenty  places  in  which  this 
scheme  has  been  put  into  operation  it  has  never  been 
found  necessary  for  any  cabinet  to  veto  an  act  which 
had  the  approval  of  both  the  representative  bodies. 

It  will  be  seen  that  the  Leitch  plan  possesses  a  con- 
siderable emotional  advantage  in  the  titular  designa- 
tion of  the  elective  committees.  Just  as  secret 
societies  get  a  deal  of  satisfaction  out  of  sonorous 
titles,  so  do  the   workmen   find   honour   in   being 


160      COMMON  SENSE  AND  LABOUR 

"senators"  and  "representatives."  The  dignity  of 
the  titles  undoubtedly  adds  to  the  conscientiousness 
with  which  they  perform  their  duties.  The  success 
of  the  plan,  however,  is  not  in  its  mechanics,  but  in 
the  fact  that  Mr.  Leitch  is  a  man  of  strong  personahty 
wholly  believing  in  himself  and  what  he  has  to  offer 
and  therefore  he  succeeds  in  selling,  that  is  in  convinc- 
ing, both  the  workers  and  the  employer  of  the  pecuni- 
ary and  moral  benefits  of  being  just  and  fair. 

He  initiates  the  system  by  a  series  of  talks  develop- 
ing the  elemental  principles  of  justice,  energy,  econ- 
omy, and  efficiency,  all  of  which  culminate  in  service, 
and  he  takes  these  undoubtedly  commendable  vir- 
tues out  of  their  usual  atmosphere  of  abstract  good- 
ness and  puts  them  into  the  day's  work.  It  is  in  this 
primary  conjunction,  in  this  prying  open  of  minds, 
so  that  all  hands  profess  themselves  willing  to  take  a 
chance,  that  the  plan  usually  succeeds  in  getting  a  fair 
start — and  it  is  about  one  half  of  the  battle  to  get  a 
fair  start.  Getting  away  to  a  fair  start  does  not 
mean  that  the  people  are  convinced,  but  it  does  mean 
that  they  will  suspend  judgment  and  take  a  chance. 
Sometimes  we  forget  that  any  measure  of  self- 
government  suddenly  dumped  upon  the  people  bene- 
fits that  people  in  much  the  same  way  that  a  ton  of 


COMMON  SENSE  AND  LABOUR      161 

coal  would  benefit  a  householder  quite  out  of  coal 
if  it  were  delivered  to  him  all  at  once  and  unexpect- 
edly when  he  happened  to  be  standing  in  the  bin. 

The  Packard  Piano  Company  at  Fort  Wayne, 
Indiana,  the  Shelton  Looms  of  Sidney  Blumenthal 
&  Company  at  Shelton,  Connecticut,  and  the  tobacco 
pipe  factory  of  William  Demuth  &  Company  at 
Brooklyn  Manor,  New  York,  are  the  most  conspic- 
uous examples  of  this  industrial  democracy. 

The  Packard  Piano  Company  has  been  running 
under  the  plan  for  nearly  seven  years,  and  the  most 
startHng  result  is  that  by  better  methods  and  better 
machinery  invented  almost  wholly  by  the  men  the 
plant  force  has  been  reduced  from  268  to  168  and  the 
former  production  has  been  nearly  tripled.  In  this 
plant  the  interest  of  the  men  is  so  intense  and  they 
feel  themselves  so  much  a  part  of  the  business  that 
not  long  since  they  resolved  in  meeting  that  the  presi- 
dent should  take  a  vacation.  He  took  a  vacation 
and  they  materially  increased  production  during  his 
absence! 

The  reduction  in  men,  it  is  well  to  add,  was  effected 
during  the  dull  period  of  1914  when  more  than  a  hun- 
dred men  had  to  leave  because  the  factory  was  on  part 
time,  arranged  for  by  the  workers  themselves.   When 


162      COMMON  SENSE  AND  LABOUR 

business  picked  up  again  the  remaining  men  found 
that  through  better  methods  they  could  handle  the 
work  without  taking  on  additional  people. 

The  Blumenthal  Company  makes  velvet  fabrics 
which  are  exceedingly  easy  to  spoil  in  manufacture. 
The  company  had  considerable  difficulty  not  only  with 
the  amount  of  production  but  also  with  the  kind  of 
production,  the  number  of  ^'seconds"  turned  out  being 
wholly  disproportionate.  After  the  men  themselves 
had  obtained  a  voice  in  the  management  of  the  busi- 
ness they  evolved  a  quality  bonus  based  on  perfect 
production.  They  investigated  tools  and  machinery, 
made  no  end  of  improvements,  and  not  only  very 
largely  increased  production  but  also  practically 
eliminated  the  "seconds"  which  up  to  that  time  had 
been  such  a  serious  factor. 

In  the  Demuth  Company  almost  the  same 
story  is  had  excepting  that  here  the  whole  process 
of  making  tobacco  pipes  was  examined  and  improved 
to  the  end  that  poor  workmanship  resulting  in 
pipes  which  had  to  be  sold  at  lower  prices  was  all  but 
eliminated. 

In  all  of  these  cases  and  in  every  other  case  where 
Industrial  Democracy  has  been  tried,  not  only  have 
wages  been  raised  but  the  comparative  cost  of  the 


COMMON  SENSE  AND  LABOUR      163 

product  also  has  been  lessened — which  is  real  manu- 
facturing. 

The  Demuth  Company  offers  an  interesting  ex- 
ample of  what  can  and  what  cannot  reasonably  be 
expected  from  representation  and  the  part  which 
strikes  really  play.  The  Demuth  employees,  al- 
though the  men  were  receiving  entirely  satisfactory 
wages  and  the  bulk  of  them  were  satisfied  that 
through  intelligent  effort  they  could  continuously 
better  their  situations,  went  on  strike  and  stayed  out 
for  about  a  fortnight  in  spite  of  everything  that  could 
be  done  to  the  contrary.  The  strike  was  not  author- 
ized by  the  House  or  by  the  Senate.  It  did  not  have 
the  support  of  the  English-speaking  workers.  It 
was  exclusively  among  the  foreigners  who  did  not 
speak  EngHsh  and  it  was  caused  not  through  any 
desire  for  the  bettering  of  wages  or  working  condi- 
tions, but  solely  by  a  group  of  extreme  radicals  who 
convinced  the  aHens  that  the  time  had  come  to  start 
the  Social  Revolution. 

This  strike  illustrates  that  in  one  section  of  what  is 
known  as  the  industrial  problem  there  exists  an  in- 
sanely radical  element  which  has  to  be  recognized,  ac- 
cepted as  incurable,  and  prepared  against.  It  is  part 
of  the  revolutionary  creed  to  preach  that  those  who 


164      COMMON  SENSE  AND  LABOUR 

do  not  work  exclusively  with  their  hands  and  some- 
times use  their  brains  are  in  constant  and  deadly  terror 
of  those  who  sometimes  use  their  hands  and  never  use 
their  brains.  It  is  extraordinarily  diflBcult  to  deter- 
mine when  force  should  be  used,  for  force  is  always 
the  first  reply  of  the  blockhead,  than  whom  no  better 
example  exists  than  the  average  policeman!  But  it 
is  to  be  borne  in  mind  that  just  as  certain  mental  dis- 
orders are  helped  by  a  plunge  into  cold  water,  so  also 
other  disorders  wrongly  classed  as  "industrial"  are 
cured  by  what  is  vulgarly  known  as  a  "bat  in  the  eye." 
When  a  strike  has  a  cause  the  representatives  can 
well  handle  it.  In  the  American  Multigraph  Com- 
pany of  Cleveland  (whose  representative  plan  has 
been  previously  described)  the  toolmakers  asked  for  a 
heavy  flat  increase  in  rates.  A  good  mechanic  is  very 
scarce  in  these  days.  Industry  conducted  by  un- 
imaginative mechanical  engineers  with  their  noses 
continually  poking  into  blue  prints  has  evolved 
machines  to  take  the  place  of  human  skill  and  now 
when  skilled  mechanics  are  needed  they  are  very  hard 
indeed  to  obtain  and  so  a  toolmaker  is  apt  to  be 
rather  chesty.  This  particular  group  of  toolmakers 
thought  itself  so  essential  that  it  might  go  in  for  some 
lavish  wage  increases. 


COMMON  SENSE  AND  LABOUR      165 

An  employees'  committee  investigated  the  wages 
in  tlie  department  and  they  reported  that  a  flat  in- 
crease would  be  gross  extravagance,  for  although  a 
few  of  the  men  were  underpaid,  a  considerable  num- 
ber were  grossly  overpaid  and  that  those  whose  pay 
was  out  of  all  proportion  to  their  abiHty  had  been 
most  active  in  demanding  the  flat  increase.  The  com- 
mittee went  over  the  whole  scale  of  wages  in  the  de- 
partment, raised  some  men,  and  reduced  others.  A 
few  of  those  who  were  reduced  stayed  on  and  the 
others  left.  Then  this  committee  went  carefully 
through  the  wages  of  the  entire  manufacturing  side 
of  the  establishment,  correcting  as  far  as  possible  every 
inequahty,  and  very  successfully  trying  to  coordinate 
abiHty  and  remuneration.  Having  finished  the  fac- 
tory they  asked  for  permission  to  look  over  the  oflSce 
with  the  idea  in  mind  that  everyone  should  get  what 
was  coming  to  him.  Because  oflfice  people  are  com- 
paratively easy  to  get  and  the  holder  of  a  white-collar 
job  usually  inclined  toward  meekness,  no  end  of  irreg- 
ularities were  turned  up  in  the  oflBce.  They  found  a 
few  people,  who  had  persistently  presented  their 
claims,  overpaid.  They  found  others  who  were  afraid 
to  talk  about  their  wages  underpaid,  and  here  again 
the  committee  adjusted  service  and  remuneration, 


166      COMMON  SENSE  AND  LABOUR 

taking  into  account  not  only  the  actual  services  ren- 
dered, but  the  market  value  of  such  services  in  other 
parts  of  Cleveland  which  data  they  obtained  by  jSrst- 
hand  investigation.  I  have  never  heard  of  a  more 
thorough  or  more  successful  task  of  wage  adjustment 
than  this  one  which  was  carried  through  by  workers 
whose  conception  of  wages  is  usually  supposed  to  be 
bound  up  in  the  word  "more." 

The  Procter  &  Gamble  Company,  whose  profit- 
sharing  and  other  plans  were  noticed  in  an  earlier 
chapter,  has  had  a  most  remarkable  industrial  career 
and  has  for  a  year  and  a  half  been  operating  an  em- 
ployees' conference  plan  with  such  excellent  results 
that  no  notable  disturbance  in  eflficiency  has  occurred 
since  the  Armistice. 

I  harp  back  to  this  bridging,  to  the  period  between 
war  work  and  peace  work,  because  in  America  as  well 
as  in  every  other  beUigerent  country  the  efficiency 
of  the  workers  steadily  decreased  during  the  war  and 
after  the  Armistice  dropped  to  a  new  low  level,  which 
is  variously  estimated,  but  which  is  probably  about 
one  half  of  the  pre-war  efficiency.  Any  industrial 
organization  that  passes  this  point  without  dropping 
in  efficiency  is  well  worth  investigation. 

The   Procter   &   Gamble   Company   through  it* 


COMMON  SENSE  AND  LABOUR       167 

president,  William  Cooper  Procter,  was  among  the 
earliest  to  regard  employees  as  something  more  than 
human  chattels.  Beginning  as  a  firm  away  back  in 
1837,  they  have  steadily  progressed  and,  by  advertis- 
ing and  other  means,  have  sold  their  product  not 
only  to  the  public,  so  that  it  has  become  a  household 
word,  but  also  to  the  employees  themselves. 

The  influence  of  advertising  in  selling  a  company 
not  only  to  the  public  but  to  its  own  people  is  a  sub- 
ject all  in  itself.  The  words  used  in  the  advertising 
have  to  be  true  words  and  they  have  to  be  backed  up 
by  the  company,  and  when  thus  considered,  advertis- 
ing is  undoubtedly  a  great  help,  but  also  it  is  a  two- 
edged  sword.  Nothing  will  so  quickly  break  up  an 
organization  as  any  kind  of  untrue  advertising,  for 
that  convinces  the  working  people  that  they  are 
employed  by  a  lot  of  crooks.  The  advertising  of  in- 
dustrial good  will  is  also  dangerous. 

The  Procter  &  Gamble  Company  has  the  back- 
ground of  honest  performance  and  tradition  and  I 
think  it  is  their  career  of  honest  effort  in  making  a 
product  as  well  as  in  dealing  with  the  employees  that 
forms  the  foundation  of  their  industrial  situation. 

The  company  has  been  particularly  fortunate  in 
keeping  its  employment  administration  entirely  free 


168      COMMON  SENSE  AND  LABOUR 

from  quackery  and  paternalism  and  its  various  ex- 
periments in  profit-sharing  (although  to  my  mind 
meaning  very  little  of  themselves)  have  at  least  con- 
vinced the  employees  not  only  of  the  company's  de- 
sire to  be  fair,  but  also  of  its  desire  to  keep  ahead  of 
the  procession  and  to  have  something  a  Httle  better 
than  any  one  else  has. 

The  development  of  the  company  toward  repre- 
sentative government  is,  therefore,  to  be  considered 
as  an  effort  to  keep  fully  abreast  of  the  times  rather 
than  as  a  new  idea  introduced  to  meet  an  emer- 
gency. The  company  began  to  experiment  with  shop 
committees  in  1917,  and  these  developed  into  what  is 
known  as  the  Employees*  Conference  Plan  with  the 
idea  in  mind  that  the  representatives  should  con- 
structively cooperate  to  the  end  as  expressed  in  the 
Constitution  that  there  might  be  promoted  "mutual 
imderstanding,  .  .  .  friendly  relationship,  and 
.  .  .  of  efficient  cooperation  to  a  greater  extent 
than  theretofore  ...  to  afford  the  employees 
ready  means  of  making  suggestions  and  of  bringing 
to  the  direct  attention  of  the  management  matters 
which  in  their  opinion  need  adjustment  or  correction, 
as  well  as  to  give  to  the  management  opportunity  to 
outline  its  views  and  plans  to  the  workmen,  to  the  end 


COMMON  SENSE  AND  LABOUR      169 

that  both  may  benefit  and  that  a  fuller  understanding 
may  exist." 

There  is  a  committee  for  each  of  the  three  main 
plants  of  the  company,  and  each  committee  is  in  turn 
composed  of  representatives  elected  by  the  employees 
with  a  representative,  for  each  fifty  employees  and 
one  at  least  for  each  department.  Each  committee 
has  an  Executive  Council  made  up  of  the  oiBficers 
elected  by  the  committee  and  four  members  appointed 
by  the  Chairman.  The  Executive  Committee  is  the 
active  working  body.  The  committee  at  Ivorydale 
may  be  taken  as  an  example  and  especially  its  treat- 
ment of  the  eight-hour  day.  The  committee  con- 
sidered the  shorter  work  day  and  the  changes  in  the 
wage  scale  and  so  competently  worked  out  every 
detail  that  the  company  put  their  recommendations 
into  effect  without  change.  They  have  gone  into 
many  other  matters,  such  as  a  Health  Service  De- 
partment and  an  Emergency  Fund  for  the  immediate 
assistance  of  employees  in  distress,  and,  as  seems 
always  to  be  the  case  when  a  committee  is  given  real 
responsibility  and  untrammelled  opportunity,  they 
accept  and  administer  their  responsibility  in  whole- 
hearted and  intelligent  fashion. 

A  further  step  of  this  company  is  the  inclusion  in 


170      COMMON  SENSE  AND  LABOUR 

the  Board  of  Directors  of  three  members  to  be  elected 
by  the  employees.  It  is  too  early  as  yet  to  state 
whether  such  membership  will  be  of  any  practical 
benefit,  for  this  will  depend  almost  entirely  upon  the 
type  of  men  that  the  workers  elect.  Undoubtedly 
it  will  give  an  opportunity  for  the  dissemination  of 
knowledge  concerning  industrial  enterprise,  which  is 
always  of  the  highest  value,  but,  on  the  other  hand, 
if  the  employee  members  are,  as  is  usually  the  case, 
afraid  to  speak  out  in  meeting,  their  presence  will  not 
amount  to  anything  one  way  or  the  other. 

These  are  the  most  prominent  examples  of  indus- 
trial representation — prominent  in  point  of  accom- 
plishment rather  than  in  size,  and  many  other  plans 
have  been  omitted  either  because  they  do  not  differ 
from  those  already  described,  or  because  the  per- 
formances have  not  been,  for  one  reason  or  another, 
wholly  successful. 


CHAPTER  SEVEN 

THE   ECONOMIC    TRUTHS   OP   WORK 

"  Well,  what  are  you  going  to  do  about  it?  What's 
your  method?    What  solution  have  you?" 

One  cannot  long  discuss  the  relations  of  work  with- 
out being  abruptly  brought  up  in  what  I  beHeve  is 
called  "hard-headed"  fashion  against  the  necessity 
for  detailing  a  "remedy  for  labour  unrest,"  with 
numbered  sections  like  a  patent  medicine  catalogue, 
giving  full  directions  on  just  what  to  take  for  each 
and  every  ill  of  the  body  industrial.  Now  I  should 
not  like  to  say  that  being  "hard-headed"  in  dealing 
with  the  human  relation  in  industry  is  on  all  fours 
with  being  simply  "bone-headed,"  but  the  difference 
for  practical  purposes  may  be  disregarded. 

No  one  who  had  failed  in  business  would  demand 
an  instant  national  conference  to  devise  a  programme 
that  would  infalhbly  prevent  commercial  failure. 
No  one  has  quite  faith  enough  in  the  law  for  that. 
Yet  people  meet  with  all  seriousness  to  settle  the 
actions  and  reactions  of  the  human  being  when  en- 

171 


172      COMMON  SENSE  AND  LABOUR 

gaged  in  industry  either  as.  employer  or  employee. 
We  make  merry  over  the  minute  regulations  of  the 
old  guilds  and  of  various  long-dead  potentates  and 
wonder  how  autocracy  could  ever  be  so  gravely 
whimsical,  and  in  the  same  breath  we  ask  for  some 
better-phrased  regulations  to  accomplish  the  same 
ends.  The  employer  would  bind  and  gag  the  em- 
ployee. The  employee  conceives  of  justice  as  the 
figure  of  an  employer  done  up  in  a  straitjacket. 

Everywhere  is  the  notion  that  the  war  somehow 
changed  the  world  in  an  elemental  way.  A  lot  of  very 
high  authorities  said  that  it  was  going  to  change  it  and 
not  a  few  were  quite  specific  about  it.  The  common 
difficulty  of  all  of  these  millenniums  is  that  while  they 
point  out  the  various  ways  in  which  we  should  all 
like  to  have  the  world  bettered,  none  of  them  gives 
a  clue  as  to  how  Mother  Nature  may  be  made  more 
generous.     Take  a  sample. 

In  the  discussion  by  the  International  Labour 
Conference  at  Washington  over  the  universal  eight- 
hour  day  one  delegate  was  bold  enough  to  suggest 
that  perhaps  the  eight-hour  day  was  not  entirely 
feasible  because  the  length  of  time  that  people  spend 
at  their  work  was  possibly  not  so  important  as  the 
amount  of  work  that  they  did.    Thereupon  a  French 


COMMON  SENSE  AND  LABOUR      173 

delegate  arose  and  reproachfully  accused  the  former 
speaker  of  trying  to  take  labour  back  into  the  Dark 
Ages  and  of  failing  to  realize  that  this  was  a  new 
world  which  was  not  going  to  be  fettered  by  any  of 
the  old  ideas.  Really  he  was  so  sad  about  it  all  that, 
on  the  whole,  it  was  rather  a  moving  spectacle. 

It  is  this  aesthetic  divorce  of  labour  from  work 
that  is  behind  much  of  what  we  may  call  "industrial 
unrest."  There  is  a  great  clatter  about  rights  and 
only  a  few  whisperings  about  work.  The  prevailing 
tendency  is  to  agree  with  those  who  assert  that  the 
war  made  a  "new  world"  and  that  the  great  cata- 
clysm of  war  swept  away  all  of  the  unloveliness  and 
hardship  which  have  been  with  us  for  so  many  thou- 
sands of  years.  But  if  you  will  look  about,  you  will 
discover  that  fish  are  just  as  hard  as  ever  to  take 
from  the  sea;  that  grain  does  not  grow  any  more 
readily  or  more  quickly  than  ever  it  did;  that  the 
mines  do  not  give  up  their  contents  by  tapping  them 
with  a  wand,  and  that  there  are  no  fairies  about  ready 
to  clothe  and  feed  the  multitude.  The  more  you 
examine  into  this  old  world  the  less  you  can  dis- 
cover in  the  way  of  improvement  wrought  by  several 
years  of  war.  It  is  poorer  than  it  was,  it  is  producing 
less  than  it  did,  and  it  has  its  sense  of  values  consider- 


174      COMMON  SENSE  AND  LABOUR 

ably  jarred  and  twisted.  In  fact,  about  the  only 
real  change  of  a  fairy  like  nature  that  has  come  about 
is  the  remarkable  ability  demonstrated  by  govern- 
ments to  make  one,  two,  or  three  dollars  grow  where 
only  one  grew  before,  although  it  is  beginning  to  sink 
into  a  few  minds  that  this  new  crop  of  dollars  does 
not  contain  so  much  nourishment  as  did  the  old  crop. 
The  caloric  content  of  the  new  coinage  is  consider- 
ably less  than  that  of  the  old. 

Nothing  has  happened  to  decrease  the  importance 
of  work,  and  the  labour  problem  gets  down  even- 
tually to  simple  economics  and  to  the  controlling 
proposition  that  prosperity  increases  only  according 
to  the  margin  of  production  over  consumption.  Out 
of  that  margin  all  capital  is  created.  When  the 
amount  of  capital  in  a  community  is  small  and  the 
amount  of  labour  is  large,  then  the  condition  of 
labour  must  be  bad  because  there  is  not  enough 
productivity  to  support  it.  That  is,  labour  bids 
against  itself  for  the  right  to  work  for  capital.  Such 
is  the  condition  of  China;  there  it  is  cheaper  to  hire  a 
dozen  men  than  to  put  in  a  machine  costing  $100. 
When,  however,  the  supply  of  capital  is  larger  than 
the  supply  of  labour  it  is  capital  that  has  to  compete 
for  labour.     Then  labour  has  the  advantage. 


COMMON  SENSE  AND  LABOUR      175 

Japan  affords  the  best  modern  view  of  a  country 
that  is  passing  from  the  one  stage  to  the  other. 
When  Japan  started  on  its  industrial  career  there  was 
a  vast  amount  of  labour  and  very  little  capital. 
Consequently  a  man  could  not  command  more  than 
a  bare  existence.  There  were  no  strikes,  there  could 
be  none — if  a  man  lost  his  job  he  was  lucky  not  to 
starve  to  death.  As  industry  has  increased  the 
Japanese  supply  of  capital,  the  workmen  have  begun 
to  assume  an  air  in  the  nature  of  independence  and 
lately  we  have  seen  great  strikes  in  Japan.  Had  not 
the  amount  of  capital,  that  is  the  amount  of  produc- 
tive means  in  Japan,  vastly  increased  during  these 
last  ten  years  so  that  more  and  more  labour  had  to  be 
bought  in  order  to  keep  this  capital  employed,  these 
strikes  in  Japan  would  have  been  impossible. 

Whichever  way  you  turn  in  this  whole  industrial 
situation  you  run  up  against  the  fact  that  unless 
you  produce  more  you  cannot  have  more.  In  Amer- 
ica there  have  always  been  more  facilities  needing 
the  employment  of  labour  than  there  were  men  to 
be  employed.  Consequently  wages,  compared  with 
the  rest  of  the  world,  have  been  high.  In  Russia 
there  are  millions  of  people  and  a  very  small  amount 
of  capital,  that  is,  of  productive  enterprise,  and  con- 


176      COIVIMON  SENSE  AND  LABOUR 

sequently  only  a  mere  pittance  in  wages  has  ever 
been  paid.  It  would  seem  to  be  self-evident,  then, 
that  it  is  more  or  less  nonsense  to  talk  about  wages 
and  hours  as  abstract  affairs,  that  it  is  ridiculous 
for  any  body  of  people  to  come  together  from  all  over 
the  world  and  try  to  decide  on  how  many  hours  of 
labour  each  day  will  be  required  to  support  life. 
Certainly  it  will  require  less  labour  in  the  Sandwich 
Islands  where  clothing  need  not  be  worn  and  dinner 
may  be  had  by  shaking  a  tree  than  in  New  England 
where  the  winters  are  cold,  the  ground  is  sterile,  and 
about  all  that  the  earth  yields  willingly  is  a  grave. 
Yet  it  was  no  more  than  this  question  that  moved 
the  French  and  several  other  delegates  almost  to 
tears !  It  not  only  shocked  but  also  grieved  them  to 
have  any  one  mention  such  things  in  this  "new 
world." 

The  point  is  that  leisure  succeeds  and  does  not 
precede  work,  that  if  you  plan  a  day  with  four  hours 
of  work  and  four  hours  of  poetry-writing  you  are 
perfectly  justified  provided  that  you  find  more  nour- 
ishment in  poetry  than  in  beefsteak.  The  hours  of 
labour  are  determined  by  an  adjustment  between 
what  we  want  and  what  we  are  willing  to  work  for, 
and  the  hope  of  leisure  can  spring  only  out  of  a  con- 


COMMON  SENSE  AND  LABOUR      177 

fidence  in  the  ability  of  collective  brains  to  provide 
facilities  by  which  a  man  may  do  more  with  less  effort. 
The  only  way  to  provide  these  facihties  is  by  increas- 
ing the  margin  of  production  over  consumption,  for 
it  is  that  margin  which  provides  the  capital  for  in- 
creased facilities. 

All  of  this  is  rather  hard  to  imderstand  because 
we  are  accustomed  to  thinking  in  terms  of  money 
rather  than  in  terms  of  things,  and  instinctively  we 
realize  that  it  does  not  get  us  anywhere  to  blame 
things  on  Nature.  We  pass  the  buck  into  the  lap 
of  something  which  is  vaguely  called  Capital. 

Capital  is  supposed  to  own  the  instrumentalities 
of  work.  Labour  is  supposed  to  operate  them,  while 
the  Public  is  supposed  to  do  the  consuming.  They 
are  convenient  and  almost  meaningless  terms.  There 
are  a  few  owners  of  capital  who  do  not  work,  but 
there  are  precious  few  of  them  who  do  not  manage 
and  none  of  them  who  do  not  consume  and  thus 
become  part  of  the  public.  There  are  a  few  workers 
who  do  not  own  anything  of  a  productive  nature, 
but  they  again  form  part  of  the  consuming  PubUc. 
When  you  try  to  find  out  who  make  up  the  Public,  the 
real  trouble  starts,  for  it  is  quite  impossible  even  in  a 
particular  controversy  such  as  the  steel   strike  to 


17«      COMMON  SENSE  AND  LABOUR 

separate  the  employers  and  the  strikers  from  that 
Public  which  they  are  supposed  to  serve.  And  yet, 
despite  the  facts,  we  find  a  man  like  Arthur  Hender- 
son booming  in  this  fashion: 

The  capitalist  governments,  bankrupt  of  expedients,  merely 
reiterate  the  cry  of  "increased  production,*'  but  the  workers  ask: 

"Production  for  what  purpose? 

"That  the  profiteers  and  the  exploiters  may  continue  to  feed 
on  the  substance  of  working-class  life,  and  that  industry  may  still 
yield  profits  to  non-producers,  or  to  enable  the  exhausted,  im- 
poverished peoples  to  reestablish  and  improve  their  standard 
of  life  and  thus  to  elevate  the  general  level  of  existence?" 

There  is  a  certain  balance  m  nature  that  cannot 
be  neglected  without  disaster.  First,  take  the  fun- 
damental balance  between  capital  and  labour. 
The  capital  of  a  country,  to  repeat,  is  the  margin 
between  production  and  consumption;  this  margin 
is  the  only  source  of  industrial  betterment  for  it 
provides  the  facilities  for  production.  Every  im- 
provement in  the  facilities  for  production  is  for  the 
benefit  of  labour;  a  man  may  buy  an  automatic 
machine  in  the  hope  of  cutting  out  the  payment  of  a 
certain  number  of  men  and  the  men  may  resist  the 
improvement  because  it  costs  them  their  jobs.  The 
stagecoach  drivers  rebelled  against  the  steam  rail- 
way; every  improvement  in  spinning  brought  riots — 


COMMON  SENSE  AND  LABOUR       179 

indeed  almost  every  invention  in  industry  has  been 
fought  tooth  and  nail.  Yet  every  one  of  them  has 
brought  a  larger  life  to  the  worker — however  small 
that  life  may  be  in  comparison  to  what  we  should 
like  to  have  it.  In  the  old  days  a  weaver  working 
at  home  on  a  hand  loom  and  helped  by  his  whole 
family  could  do  little  more  than  exist;  he  usually  had 
to  be  a  farmer  as  well,  to  eke  out  his  industrial  earn- 
ings. When  the  power  loom  came  fully  into  use 
that  weaver's  condition  was  for  the  moment  even 
worse  because  there  being  more  men  than  jobs,  he 
had  to  take  what  was  thrown  to  him  in  the  way  of 
work  and  wages. 

There  were  for  the  time  being  more  men  than  jobs 
simply  because  the  amount  of  capital — the  facilities 
for  production — was  small.  But  soon  the  increased 
production  and  the  large  profits  of  the  owners 
brought  more  capital  into  the  world  and  caused  more 
competition  for  the  service  of  labour.  Then  the 
condition  of  the  weaver  began  to  improve  until  to-day 
the  average  weaver  is  apt  to  have  a  motor,  a  phono- 
graph, a  piano,  good  food  and  clothing,  and,  indeed, 
really  far  more  comfort  than  the  mill  owner  had  when 
the  power  loom  was  first  introduced. 

It  must  be  self-evident  that  the  profits  of  capital 


180      COMIVION  SENSE  AND  LABOUR 

and  the  wages  of  labour  must  come  out  of  what  is 
produced.  Idle  capital  is  no  more  satisfying  than 
idle  labour.  If  the  service  of  labour  is  needed  to 
make  capital  produce,  then  it  follows  that  the  more 
capital  there  is  in  the  world  the  more  demand  will 
exist  for  labour  and  the  higher  will  be  its  wages  in 
actual  buying  power.  Thus  the  rich  man  has  to 
be  considered,  whether  or  no,  as  an  economic  benefit. 
He  is  rich  because  he  consumes  less  than  he  acquires. 
His  very  desire  to  have  wealth  forces  him  to  put  out 
his  surplus  in  productive  enterprise  and  thus,  by 
increasing  the  productive  capital,  he  increases  the 
demand  for  labour. 

Every  httle  while  someone  rises  to  remark  that 
the  law  of  supply  and  demand  is  obsolete  and  that 
what  is  really  wanted  is  someone  to  decree  divisions. 
For  instance,  some  would  fix  profits  and  decree  stan- 
dards of  wages.  But  if  you  fix  profits  you  encourage 
waste;  it  is  not  human  nature  to  struggle  for  the 
honour  of  paying  a  large  tax;  therefore,  money  that 
would  ordinarily  go  into  surplus  slips  out  in  exces- 
sive salaries  and  unnecessary  services.  The  war 
taxes  are  presently  doing  that  to  business  everywhere. 
Therefore  you  decrease  the  supply  of  excess  produc- 
tive energy  and  do  not  make  for  future  improve- 


COMMON  SENSE  AND  LABOUR      181 

ment;  the  fixing  of  wages  without  regard  for  their 
productivity  likewise  Hmits  output.  Consequently  a 
concern  produces  less  and  not  more.  What  is  the 
difference.'^    It  is  this: 

The  demand  for  that  concern's  output  will  increase 
by  the  increase  in  population  and  the  price  of  the  ar- 
ticle will  go  up.  Then  fix  the  price  of  the  article — 
somebody  is  sure  to  say :  Well  and  good.  But  fixing 
the  price  of  a  thing  does  not  produce  more  of  it.  The 
most  that  can  be  done  is  to  assure  prospective  buyers 
that  when  they  do  buy  they  will  not  have  to  pay 
more  than  the  price.  In  other  words,  it  tells  a  man 
who  needs  a  pair  of  shoes  that  if  he  can  find  a  pair 
to  buy  he  will  not  be  overcharged — which  assurance, 
however,  does  nothing  at  all  toward  keeping  the 
snow  out  of  leaky  shoes ! 

If  you  fix  a  price,  then  you  have  to  go  a  step  farther 
and  decree  a  ration,  and  then  you  have  production 
for  use  and  a  vast  drab  uniformity.  And  not  only 
that  but  unless  you  have  also  an  autocracy  to  compel 
work,  the  rations  of  everything  must  grow  less — for 
the  population  will  grow  and  the  means  of  production 
will  not.  The  law  of  supply  and  demand  is  not  dead 
and  will  hardly  die  ahead  of  the  solar  system. 

Bearing  this  inexorable  fact  in  mind  it  is  easily 


182      COMMON  SENSE  AND  LABOUR 

comprehended  that  no  labour  movement  which  does 
not  contemplate  increased  production  benefits  the 
workers.  Thus  collective  bargaining,  the  eight-hour 
day,  and  all  the  other  slogans  with  which  labour 
leaders  and  radical  journals  exercise  themselves  have 
nothing  whatsoever  to  do  with  the  labour  situation. 
The  world  goes  forw^ard  by  doing  more,  not  by  doing 
less,  and  when  government  boards  or  arbitration 
boards  or  other  constituted  bodies  attempt  to  fix 
wages  without  making  any  provision  for  the  payment 
of  the  wages,  disaster  always  results. 

It  is  not  that  wages  are  alw^ays  right,  generally 
they  are  not  right,  but  the  economic  fact  is  inescap- 
able, that  if  a  wage  is  raised  without  a  corresponding 
increase  in  eflSciency  of  production  so  that  the  wage 
can  be  absorbed  and  not  passed  on  to  the  public,  only 
a  temporary  rise  has  been  granted,  for  inevitably 
the  increased  cost  will  find  its  reflection  in  a  higher 
cost  of  living.  The  present  attitude  of  many  union 
leaders  is  that  good  work  does  not  count,  and  that 
unfortunately  is  too  often  the  attitude  of  union  lead- 
ers, for  to  speak  very  plainly  on  the  subject,  few  of 
them  are  other  than  demagogues.  Their  positions 
are  always  quasi-political  in  that  they  hold  office  by 
popular  sanction  and,  therefore,  their  policies  must 


COMMON  SENSE  AND  LABOUR      18.S 

be  guided  not  by  a  sense  of  economic  righteousness 
but  by  that  which  will  tend  to  keep  them  in  office. 
A  labour  leader  who  counsels  sound  economics  can- 
not stay  in  office  as  against  a  candidate  who  promises 
the  moon.  A  man  talking  common  sense  has  no 
chance  against  a  man  making  wild  and  untrue  state- 
ments and,  therefore,  it  is  unfortunately  a  fact  that 
the  average  labour  union  is  really  a  menace  not  to 
the  employer  but  to  the  employee. 

The  policy  of  labour  unions  tends  inevitably  to 
lower  real  wages  by  the  arbitrary  restriction  of  pro- 
duction either  frankly  by  advocating  short  working 
periods  at  high  wages  regardless  of  production,  or  by 
holding  to  a  uniform  wage  scale  based  on  the  least 
efficient  member.  The  labour  union  when  organized 
as  a  protection  to  underpaid  and  overworked  men — 
who  in  such  condition  cannot  progress  in  production 
— ^fills  a  distinct  need  in  society  by  teaching  the  em- 
ployer how  to  do  business.  But  the  labour  union 
ascendant  is  an  economic  absurdity  because  always 
it  operates  to  decrease  the  purchasing  power  of  wages. 
For  instance,  in  two  of  the  large  cities  of  the  country 
from  1,500  to  2,500  common  bricks  laid  in  the  wall  a 
day  formerly  represented  a  fair  day's  work  for  the 
bricklayer.     With  the  progression  of  Unionism  it  is 


184      COMMON  SENSE  AND  LABOUR 

now  impossible  to  have  more  than  500  to  1,000  bricks 
laid  under  the  same  conditions. 

A  most  ridiculous  incident  came  to  my  attention 
not  long  since;  a  carpenter  going  from  one  job  to  an- 
other was  laboriously  pushing  his  bicycle  and  when 
asked  why  he  did  not  ride  he  said  it  was  against  the 
imion  rules  to  ride  from  one  job  to  another  because 
that  saved  too  much  time  and  would  therefore  tend 
to  deprive  another  man  of  a  job.  He  had  the  bicycle 
with  him  because  when  he  left  his  work  in  the  evening 
he  wanted  to  get  home  as  quickly  as  possible.  This 
is  economic  insanity. 

The  purchasing  power  of  wages,  however,  may  be 
decreased  by  an  arbitrary  outside  body  with  the 
power  to  lax  the  wages  and  in  this  respect  the  Govern- 
ment Labour  Boards  during  the  war  showed  un- 
paralleled efficiency.  Mr.  Charles  Piez,  the  Director- 
General  of  the  Emergency  Fleet  Corporation,  has 
furnished  me  some  rather  strildng  facts,  as  for  in- 
stance the  following: 

In  the  case  of  a  well-managed  yard  on  the  Pacific 
coast  in  which  the  number  of  men  increased  threefold 
in  a  httle  more  than  a  year,  a  comparison  of  wages 
and  output  with  the  corresponding  items  of  two  years 
before  revealed  the  fact  that  before  the  signing  of  the 


COMMON  SENSE  AND  LABOUR      185 

Armistice  wages  had  advanced  70  per  cent.,  and  the 
output  per  man  had  dropped  to  70  per  cent.  The  result 
was  a  labour  cost  2.4  times  that  of  two  years  previous. 
In  the  case  of  two  well-managed  yards  on  the  Atlantic 
coast  the  results  in  the  one  were:  labour  advance,  120 
per  cent.;  output,  80  per  cent.;  resulting  labour  cost, 
2.75  times  that  of  the  former  period.  In  another — la- 
bour advance,  100  per  cent.;  output,  66f  per  cent.;  re- 
sulting labour  cost,  3  times  that  of  two  years  previous. 
These  increases  were  not  due  to  the  Fleet  Corpora- 
tion but  were  primarily  made  necessary  by  an  agree- 
ment among  the  American  Federation  of  Labour,  the 
Emergency  Fleet  Corporation,  and  the  Navy,  with- 
out which  the  cooperation  of  labour  could  not  have 
been  had.  This  agreement  gave  no  specific  instruc- 
tion to  the  board  on  the  subject  of  wage  increases 
but  the  general  idea  was  that  the  adjustment  should 
be  made  in  conformity  with  the  cost  of  living.  And 
to  quote  from  Mr.  Piez: 

It  takes  but  a  moment's  reflection  to  indicate  the  absolute 
futility  of  such  a  practice.  If  the  shipyard  workers  and  the  mu- 
nitions workers  were  entitled  to  such  consideration,  why  was  not 
every  wage  and  salaried  worker  earning  less  than  $2,000  per  year 
entitled  to  similar  consideration,  and  why  would  it  not  have  been 
absolute  justice  to  all  if  wages  and  salaries  had  been  advanced 
periodically  to  keep  step  with  the  rising  cost  of  living?    This 


186      COMMON  SENSE  AND  LABOUR 

would  at  least  have  had  the  advantage  that  no  one  group  would 
have  profited  at  the  expense  of  the  other;  and  the  failure  of  such 
a  step  to  overtake  or  even  stay  so  elusive  an  affair  as  the  cost  of 
living  in  war  times  might  have  forcibly  brought  home  to  all  of  us 
that  increased  production  of  the  individual  and  increased  self- 
denial  in  consumption  were,  after  all,  the  only  effective  remedies 
to  apply  to  the  situation. 

It  must  be  admitted  that  much  of  the  labour  unrest  that  mani- 
fested itself  in  these  wage  demands  grew  out  of  the  unwise  and 
unregulated  competition  for  the  available  labour  by  the  employ- 
ers. Wise  and  proper  use  of  the  available  labour  supply  was 
just  as  essential  as  wise  allocation  of  the  supply  of  raw  materials, 
yet,  while  we  had  a  large  body  of  experts  in  the  War  Industries 
Board  controlling  the  supply  and  distribution  of  materials,  the 
directive  control  of  the  supply  of  labour  was  left  to  a  few  de- 
tached individuals  or  boards  that  were  supposed  to  enlist  in  a 
scheme  of  voluntary  cooperation  and  coordination  under  the 
none-too-powerful  and  none-too-effective  direction  of  the  War 
Labour  Policies  Board.     ... 

But  turn  the  crank  a  little  farther  and  look  at  the 
employer.  How  many  employers  really  know  the 
relation  of  the  wages  they  pay  to  the  work  done? 
How  many  employers  do  not  resent  wage  payments 
above  arbitrary  sums  that  they  have  in  mind.'^  In 
other  words,  how  many  employers  really  know  w^hat 
they  are  doing  .^ 

An  encouragingly  large  number  of  employers  do 
to-day  know  what  they  are  doing,  but  it  must  be  ad- 
mitted that  the  general  state  of  economic  knowledge 


COMMON  SENSE  AND  LABOUR      187 

among  employers  is  not  greater  than  that  among  the 
union  men.  Each  is  dense  in  his  own  way  and  he 
likes  his  way.  I  heard  a  fairly  large  employer  say 
not  long  ago  that  his  trade  association  had  benefited 
him  only  once  and  that  was  when  the  members  met 
and  mianimously  resolved  to  reduce  wages!  He  said 
that  that  was  the  only  really  first-class  meeting  he  had 
ever  attended.  Yet  that  man  objects  to  the  unions 
doing  the  same  sort  of  thing  but  in  a  different  direc- 
tion. 

Now  there  is  one  other  delusion  that  is  continually 
getting  us  into  trouble  and  that  is  the  acceptance  of 
the  statement  .that  work  is  imdesirable  and  that  a 
man  is  happier  with  leisure  than  with  work.  Indeed 
perhaps  the  majority  of  people  look  forward  to  the 
day  when  they  will  have  amassed  enough  money  to 
quit  work.  If  it  be  true  that  a  life  of  leisure  is  the 
most  desirable  then  we  cannot  blame  the  manual 
worker  for  deciding,  however  wrongly  or  prematurely, 
to  have  his  in  the  present  and  let  the  future  take  care 
of  itself.  But  is  not  that  work  which  takes  the  full 
creative  power  of  a  man  the  finest  of  all  pleasures? 
And  we  have  seen  that  even  the  humblest  of  tasks  can 
be  so  shaped  as  to  absorb  a  deal  of  creative  energy. 

We  started  out  to  find  a  labour  problem  and  have 


188      COMMON  SENSE  AND  LABOUR 

discovered  something  more  in  the  nature  of  an 
economic  problem  that  is  too  complex  for  bulk  solu- 
tion and  yet  is  not  so  very  difficult  when  split  up  into 
little  sections.  Perhaps  in  our  hunt  for  the  universal 
remedy  we  are  neglecting  the  less-pretentious  rem- 
edies right  at  hand. 

Are  we  not  tending  to  put  too  much  faith  and 
hope  in  patent  medicines.? 

And  too  little  in  common  sense? 


CHAPTER  EIGHT 

THE   MAN   AND    THE   MACHINE 

Bricklayers  are  a  refractory  lot.  Under  the  con- 
trol of  a  powerful  union  they  have  steadily  increased 
their  prices  and  limited  their  day's  work.  Some 
years  ago  a  new  scientific  way  of  laying  bricks  was 
devised  in  which  waste  motion  was  cut  out  and  the 
bricklayer's  capacity  was  many  times  multiplied. 
In  the  fear  that  they  might  within  a  short  time  lay 
all  the  bricks  the  world  had  to  lay  they  put  on  arti- 
ficial limitations.  To-day  bricklaying  is  not  only 
expensive  but  the  bricklayers  strike  at  the  drop  of  a 
hat.  What  has  happened.'^  Contractors,  when  they 
can  possibly  avoid  it,  do  not  build  houses  of  brick, 
nor  do  they  lay  pavements  of  brick.  Instead  they 
use  reinforced  concrete.  In  a  recent  operation  at 
Youngstown,  Ohio,  five  men  erected  three  houses 
in  two  days.  In  that  operation  the  contractors  put 
up  a  community  of  281  solidly  built,  attractively 
designed,  concrete  houses,  with  sewers,  streets,  and 
all  that  a  town  should  have,  in  less  than  a  year,  and 

189 


190      COIMMON  SENSE  AND  LABOUR 

at  no  time  were  more  than  200  men  employed  on 
the  job.  Plasterers  and  carpenters  have  gone  the 
way  of  the  bricklayers;  therefore,  in  this  new  type 
of  house  75  per  cent,  of  the  carpenter  work  has  been 
ehminated  and  in  a  still  newer  house  they  are  putting 
in  steel  sashes,  mastic  floors,  and  concrete  base- 
boards so  that  there  will  be  no  carpenter  work  at  all. 
They  avoid  80  per  cent,  of  the  normal  amount  of 
plastering  and  expect  shortly  to  be  rid  of  the  remain- 
ing 20  per  cent. 

Because  the  girls  who  operate  telephone  exchanges 
will  not  remain  on  their  jobs  after  they  are  trained 
and  in  one  conspicuous  instance  in  Boston  tied  up 
the  whole  business  of  the  city  by  going  on  strike,  the 
telephone  companies  are  introducing  an  automatic 
exchange  which  is  working  with  entire  satisfaction  in 
150  towns  and  is  shortly  to  be  tried  in  New  York. 
Because  the  compositors  and  printers  of  New  York 
imagined  themselves  so  necessary  to  the  conduct  of 
the  world  that  they  could  not  only  demand  any  wages 
and  hours  that  they  saw  fit  but  also  could  censor  what 
went  into  the  publications  they  printed,  new  methods 
to  avoid  composition  and  printing  are  being  pushed. 
Small  oflSce  matter  is  being  multigraphed  instead  of 
printed,  and  one  magazine,  having  made  some  not 


COMMON  SENSE  AND  LABOUR      191 

wholly  unsatisfactory  experiments  in  photographic 
reproduction  instead  of  printing,  started  a  lead  which 
probably  will  result  in  the  perfecting  of  a  new  process 
that  will  not  require  compositors.  Germany,  being 
shut  off  from  imports  of  cotton,  discovered  that  a 
splendid  cloth  might  be  woven  out  of  nettles  and 
that  paper  possessed  unthought-of  possibilities  in 
the  weaving  line. 

And,  on  the  other  hand,  not  a  few  employers,  un- 
willing or  unable  to  change  their  processes,  are  look- 
ing toward  the  Orient  for  plant  sites.  One  great 
company  making  incandescent  lamps  finds  it  cheaper 
to  manufacture  in  Japan  than  in  the  United  States 
and  expects,  unless  conditions  in  the  United  States 
improve,  to  make  all  its  lamps,  which  as  yet  require 
a  considerable  amoimt  of  hand  work,  across  the 
Pacific.  Within  the  last  year  a  number  of  large 
American  companies  have  had  representatives  in- 
vestigating Japanese  sites  and  conditions.  The  same 
sort  of  movement  is  quietly  going  on  in  England  and 
at  least  one  nationally  known  firm  has  closed  its 
British  factories  and  moved  abroad  simply  because 
it  finds  further  negotiations  with  English  labour 
unprofitable.  Under  government  management,  the 
United  States  freight  and  express  conditions  are  so 


192      COMMON  SENSE  AND  LABOUR 

bad,  the  carriage  is  so  expensive,  and  the  delays  are 
so  maddening  that  motor  truck  Hnes  have  been 
estabhshed  all  over  the  country.  Wlien  the  long- 
shoremen of  New  York  went  on  strike  and  tied  up 
the  port's  shipping,  the  owners  of  many  of  those  ves- 
sels took  advantage  of  the  opportimity  to  change 
from  coal  to  oil  burning — ^for  with  an  English  coal 
strike  on  and  an  American  coal  strike  threatened, 
coal  as  a  fuel  became  wholly  undesirable. 

Wherever  you  happen  to  poke  your  nose  in  indus- 
try or  commerce  you  will  find  that  shortages  of  men 
or  materials,  natural  or  artificial,  are  met  by  stimu- 
lated human  ingenuity — all  of  which  goes  to  show 
first  how  beautifully  nature  orders  its  affairs  to  pro- 
tect mankind  from  supposed  monopolies  and  how 
utterly  ridiculous  it  is  for  any  group  of  men,  whether 
they  be  capitalists  or  labourers,  to  imagine  that  the 
progress  of  the  world  can  be  held  up  for  their  benefit. 
Monopoly  is  a  comparative  word,  and,  however 
necessary  the  article  or  service  which  is  sought  to  be 
monopolized  seems  to  be,  there  is  always  a  point  of 
expense  or  convenience  at  which  something  else  is 
produced  which  is  not  only  then  uncontrolled  but 
which  probably  is  better.  A  philosophical  person 
with  a  detached  viewpoint  would  hail  the  monopolist 


COMMON  SENSE  AND  LABOUR      193 

and  the  profiteer  as  benevolent  lunatics  forcing  the 
world  rapidly  forward! 

For  instance,  Ireland  would  never  have  had  its 
splendid  linen  industry  had  not  the  English  weavers 
succeeded  in  getting  through  an  act  prohibiting  the 
weaving  of  wool  in  Ireland.  We  should  not  have  had 
beet  sugar  had  not  the  growers  of  cane  felicitated 
themselves  too  ardently  upon  being  the  sole  sources 
of  sugar.  Just  about  the  time  that  the  knight  in 
armour  had  become  impregnable  from  human  as- 
sault and  half  a  dozen  well-mounted  knights  could 
clean  up  several  thousands  of  unplated  citizens,  in 
fact,  when  they  had  reached  such  a  point  of  impreg- 
nability that  the  only  way  for  indignant  vassals 
to  get  even  was  to  trap  the  warrior  whole  and  leave 
him  in  his  can  until  he  died,  gimpowder  came  along 
and  knighthood  ceased  to  flower. 

The  appositeness  to  the  present  situation  in  the 
world  of  industry  is  that,  while  at  the  present  time  we 
are  faced  with  a  purely  temporary  unrest,  founded 
mainly  upon  an  economic  delusion  that  something 
may  be  had  for  nothing,  when  we  do  get  around  to 
brass  tacks  again  there  are  going  to  be  considerably 
more  jobs  than  there  are  people  to  fill  them.  We 
shall  then  be  nationally  faced  with  the  choice  of  find- 


194      COlVmON  SENSE  AND  LABOUR 

ing  ways  and  means  by  whicli  a  man  can  do  perhaps 
twice  as  much  as  he  is  now  doing  or  of  sending  our 
capital  abroad  to  points  where  there  are  more  men. 
The  price  of  labour  is,  in  some  industries,  fairly  un- 
important, but  other  industries  to-day  consume  a 
far  higher  proportion  of  labour  than  they  do  of  raw 
material — as  in  watch  making.  In  such  case  the 
owner  can  afford  to  take  the  raw  material  almost  any- 
where to  have  it  fabricated.  Wliatever  may  be  the 
labourer's  conception  of  the  importance  of  the  at- 
tendance that  he  dances  to  an  all  but  automatic 
machine — a  conception  rising  in  its  fullness  with  the 
I.  W.  W.  who  eloquently  claim  that  the  operator 
should  own  both  the  machine  and  the  product — 
the  thought  is  rebutted  by  the  fact  that  experience 
has  shown  that  a  pig-tailed  Oriental  can  manage 
the  machine  about  as  well  as  the  most  eloquent 
advocate  of  the  rights  of  man.  There  is  always  a 
way  out. 

We  are  short  of  labour  now.  Employment  oflBces, 
public  or  private,  do  not  exist  to  provide  jobs  for 
people  out  of  work — although  often  they  think  they 
do.  They  exist  to  provide  a  better  assortment  for 
the  prospective  worker  to  choose  from  and  to  avoid 
the  wearisome  task  of  personally  investigating  the 


COMMON  SENSE  AND  LABOUR       195 

qualifications  of  a  large  number  of  employers.  A 
certain  amount  of  emigration  is  taking  place.  It  is 
not  serious.  A  few  are  but  fulfilling  the  intention 
they  came  here  with — they  imagine  that  conditions 
on  the  other  side  are  unchanged;  some  are  going  back 
to  discover  what  has  happened  to  their  relatives. 
Most  of  them  will  return  to  us;  a  number  of  em- 
ployers have  told  me  that  they  are  already  receiving 
letters  from  their  agents  to  that  effect.  There  will  be 
some  new  immigration  from  Europe  as  soon  as  it  is 
permitted,  but  the  bulk  of  it  will  probably  go  to  South 
America.  Our  own  industries  have  increased  their 
capacity  for  men  since  1913.  For  five  years  we  have 
had  comparatively  few  people  coming  in.  We  de- 
pended in  the  past  upon  this  steady  flow  of  immi- 
grants to  man  our  farms  and  our  machines.  When 
we  begin  the  scale  of  production  which  our  own  ne- 
cessities and  the  necessities  of  the  world  make  im- 
perative, we  shall  desperately  need  more  men  than 
we  now  have.    All  signs  point  that  way. 

Labour  is  now  in  the  ascendant;  it  will  be  even 
more  in  the  ascendant  when  money  begins  to  flow 
into  productive  enterprise.  We  may  then  expect 
to  find  one  of  the  two  things  I  have  above  outlined 
happening — that  is,  either  a  vastly  enlarged  use  of  the 


106      COJVIMON  SENSE  AND  LABOUR 

workingman  by  extending  his  powers  through  the 
addition  of  mechanical  means  and  the  elimination 
of  waste,  or  the  exporting  of  capital.  It  is  in  the  first 
direction  that  the  new  world  for  the  American  worker 
lies. 

For  talk  as  we  may  of  ihe  unequal  distribution  of 
wealth  and  regret  it  as  we  may,  the  fact  remains  that 
the  great  obstacle  to  a  better  distribution  is  not  the 
reticence  of  its  possessors  but  the  absence  of  enough 
wealth  to  distribute.  The  very  best  estimate  is  that 
if  all  rent,  interest,  and  profit  were  added  to  wages, 
the  wages  would  not  go  25  per  cent,  above 
what  they  now  are.  Turn  from  static  distribution 
to  increased  production  and  you  find  it  is  rather  easy 
to  increase  a  wage  by  one  quarter  through  an  im- 
proved process  or  machine — that  is  being  done  every 
day,  and  such  wage  increases  result  in  more  money  to 
the  worker,  more  money  to  the  employer,  and  a 
smaller  cost  price  to  the  consumer.  It  is  the  applica- 
tion of  science  to  the  work  that  helps  the  worker. 
The  social  reformer  cheers  but  does  not  invigorate. 
As  Professor  Milliken  well  said  not  long  ago: 

"One  little  new  advance  like  the  discovery  of 
ductile  tungsten  which  makes  electric  light  one  third 
as  expensive  as  it  was  before  is  a  larger  contribution 


COMMON  SENSE  AND  LABOUR      197 

to  human  well  being  than  all  kinds  of  changes  in  the 
social  order." 

Looking  into  the  progress  of  our  own  country  it 
takes  something  in  the  nature  of  a  perverted  mind 
not  to  discover  that  the  reason  we  have  paid  higher 
wages  is  that,  since  we  started  to  become  an  indus- 
trial nation,  the  investment  per  man  in  machinery 
and  tools  has  steadily  increased.  In  1899  it  was 
$1,770  per  person  employed;  in  1904  it  was  $2,117; 
in  1909  it  was  $2,488;  in  1914  it  was  $2,848,  and  a 
compilation  made  to-day  would  give  a  considerably 
higher  figure.  The  big  jump  came  between  1899 
and  1909  when  the  investment  increased  105  per  cent, 
while  the  population  of  the  country  increased  only 
21  per  cent.  To  equip  this  country  for  even  a  part 
of  the  things  it  may  do  will,  in  the  next  five  years, 
require  a  proportionately  greater  investment  than 
that  of  the  former  star  decade.  We  have  to  make 
up  not  only  two  years  in  peace  production  but  also 
two  years  in  wear  and  tear.  The  railroads,  for  in- 
stance, are  far  back  of  the  task  the  country  has  for 
them;  they  break  down  on  the  least  pressure.  They 
require  an  enormous  amount  of  money  for  rehabili- 
tation, extension,  and  improvement.  The  normal 
capital  expenditure  throughout  industry  will  have  to 


198      COIVOION  SENSE  AND  LABOUR 

be  very  large  in  order  merely  to  catch  up  with  normal 
progress.  We  have  a  supernormal  task  and  a  sub- 
normal man-power;  the  task  and  the  power  can  be 
coordinated  only  by  spending  brains  and  money 
to  find  ways  and  means  for  man  to  extend  himself 
mightily. 

How  are  we  going  about  it?  Does  industry  con- 
sider itself  "perfected"?  \Miat  is  the  attitude  to- 
ward invention?  I  asked  W.  R.  Basset,  an  indus- 
trial engineer  of  experience  in  many  industries,  to 
tell  me  some  of  the  things  he  thought  right  to  be  in- 
vented.    He  answered: 

"I  gave  some  thought  to  your  request  for  some- 
thing that  should  be  invented.  As  I  looked  over 
the  field,  every  time  I  came  at  all  near  something 
that  might  be  invented  to  advantage,  I  had  to  go  into 
the  details  and  practically  invent  the  machine  itself. 
— mentally,  at  least — to  prove  its  practicability. 

"It  would,  as  an  instance, be  fine  to  have  a  machine 
into  the  maw  of  which  one  could  pour  molten  iron, 
and  out  of  the  other  end  of  which  one  received  an 
automobile.  That  is  an  exaggerated  case.  The  con- 
clusion I  am  coming  to  as  I  run  over  our  experience 
is  that  whenever  it  occurred  to  us  that  some  device 
was  badly  needed,  coincident  with  the  thought  came 


COMMON  SENSE  AND  LABOUR      199 

action  and  the  device  would  be  constructed.  It  is 
very,  very  rare  indeed  that  one  sees  some  operation 
being  performed  and  wishes  there  were  a  machine 
to  do  it.  Whenever  that  thought  has  occurred  in  the 
last  fifty  years,  work  has  been  started  on  a  machine. 

"The  real  job  that  lies  before  us  is  to  hustle  from 
one  operation  to  another  in  all  sorts  of  industries, 
and  speculate  upon  whether  each  operation  can  be 
done  better  with  a  machine.  You,  I  am  sure,  will 
promptly  find  yourself  inventing  equipment  instead 
of  writing  of  the  need,  for  the  thought  is  indeed  father 
of  the  machine.'* 

That  is  the  keynote  of  to-day's  progress  in  what 
we  yesterday  called  "invention."  It  is  not  whether 
the  thing  can  be  done  with  a  machine;  it  is  more  or 
less  taken  for  granted  that  it  can  so  be  done.  The 
question  is  "Will  it  pay?"  And  with  men  scarce 
and  therefore  high-priced,  as  men  will  be,  the  margin 
of  cost  between  the  inanimate  and  the  animate  way 
of  doing  will  be  largely  increased  and  therefore  the 
urge  to  develop  will  be  present.  For  the  argument 
that  the  machine  has  to  prove  is  always:  "Will  it 
pay?" 

Making  a  machine  pay  is  far  more  of  a  managerial 
problem   than  making  the   services   of   man   pay. 


200      COMMON  SENSE  AND  LABOUR 

When  there  is  no  work  you  do  not  have  to  pay  a  man; 
under  our  haphazard  system  of  society  we  have 
been  accustomed  to  "lay  off "  a  man  whenever  there 
was  no  work  for  him  to  do.  The  development  of 
cost  accounting  has  shown  that  laying  off  men  and 
shutting  down  or  running  on  part  time  is  about  the 
most  expensive  of  factory  diversions  and  every- 
where intelligent  management  is  recognizing  that 
part  of  its  task,  in  order  to  qualify  as  skilled,  is  to 
keep  the  plant  going  twelve  months  of  the  year. 
The  interest  on  the  money  invested  in  machines 
keeps  right  on  whether  or  not  the  machine  is  running 
and  in  addition  the  obsolescence  (or  getting  out  of 
date)  of  a  machine  is  a  factor  always  to  bear  in  mind. 
Many  a  machine  kept  idle  for  three  years  and  "as 
good  as  new"  is  worthless  nevertheless  because  a 
better  style  has  in  the  meantime  been  invented. 

Thus,  adopting  a  machine  is  something  more  than 
just  discovering  if  the  work  can  be  done  by  a  machine. 
There  is  the  classic  case  of  a  man  who  having  made 
large  savings  by  the  introduction  of  labour-saving 
devices  became  so  obsessed  with  the  notion  that  he 
put  in  a  mechanical  conveyor  to  replace  a  man  with 
a  truck.  The  conveyor  worked  as  conveyors  do 
and  the  sight  gave  the  owner  great  satisfaction,  but 


COMMON  SENSE  AND  LABOUR      201 

a  by-stander  pointed  out  that  whereas  a  man  with 
a  single  truck  had  previously  attended  to  all  of 
the  cartage  between  the  two  points,  now  the  owner 
had  to  employ  a  man  at  one  end  to  load,  a  man  at 
the  other  to  unload,  and  in  addition  had  the  inter- 
est upon  the  investment  in  the  conveyor.  I  know  a 
merchant  in  a  small  way  who  employs  only  one  girl 
in  his  oflSce;  but  he  has  enough  accounting  ma- 
chinery in  that  office  for  a  business  of  ten  times  its 
size — ^he  must  have  several  thousand  dollars  tied  up 
in  office  appliances  to  do  work  that  the  girl  could 
easily  do  by  hand  in  half  a  day.  He  pays  for 
both  the  machines  and  the  girl  and,  of  course,  he 
wastes  money.  However,  he  does  get  an  uncom- 
mon amount  of  fun  in  seeing  the  apparatus  work  and 
he  might  charge  the  expense  to  the  entertainment 
account! 

There  is  always  the  question  of  investment.  One 
large  company  making  flooring  materials  worked 
out  an  automatic  machine  that  will  do  more  than 
twenty  men,  but  that  machine  stands  the  company 
all  of  a  million  dollars.  No  one  else  in  the  business 
has,  as  yet,  considered  it  profitable  to  venture  so 
costly  an  experiment.  And  there  is  some  doubt  in 
the  minds  of  the  owners  whether  that  machine,,  al- 


202      COMJVION  SENSE  AND  LABOUR 

though  it  works  perfectly,  Really  pays;  if  they  had 
their  money  out  they  would  hardly  make  the  step 
again.  Then,  there  is  a  machine  for  making  bottles 
that  displaces  from  ten  to  sixteen  glass  blowers.  It 
does  pay  even  although  it  cost  something  more  than 
a  million  dollars  to  develop.  For  glass  blowers  have 
always  been  scarce,  high-priced,  and  given  to  vaca- 
tions without  notice — all  of  which  works  to  the  ad- 
vantage of  the  machine. 

It  is  these  pioneers  who  have  to  pay  the  freight. 
Once  an  invention  has  been  made  thoroughly  prac- 
tical, comes  the  process  of  making  it  ever  cheaper 
to  install  and  to  operate.  In  spite  of  the  vast  cost 
of  materials  and  labour,  the  telephone  and  the  tele- 
graph are  managed  more  cheaply  per  call  than  they 
were  fifteen  years  ago.  The  ability  to  send  more 
than  one  message  on  a  wire  is  an  illustration  of  how 
equipment  can  be  intensified,  and  it  is  only  a  question 
of  time  before  there  will  be  no  wires.  The  experi- 
ments of  John  Hays  Hammond,  Jr.,  and  others  have 
gone  far  toward  the  establishing  of  electrical  impulses 
that  are  so  distinctive  as  not  to  be  interfered  with — 
and  it  is  interference  that  has  so  far  been  the  only 
large  objection  to  the  use  of  the  wireless.  Similarly, 
the  turbine  is  but  a  more  intense  way  of  using  steam 


COMMON  SENSE  AND  LABOUR      203 

power  than  was  the  older  engine.  Twenty  years 
ago  one  of  the  strongest  objections  to  the  gas  engine 
was  its  great  size  as  compared  with  its  power;  to-day 
the  strongest  point  in  favour  of  that  sort  of  engine 
is  that  it  takes  up  so  little  room  as  compared  with 
the  power  exerted.  The  progress  of  the  airplane 
depends  upon  the  further  intensification  and  develop- 
ment of  this  engine  that  was  once  too  clumsy  to  com- 
pete with  the  steam  engine. 

It  is  the  need  that  precedes  the  invention;  this  is 
a  day  of  conscious  invention.  The  day  of  haphazard 
invention  has  by  no  means  passed — any  one  who 
would  predict  limitations,  who  would  say  that  we 
shall  take  this  or  that  line — would  be  more  than  fool- 
ish. Some  man  just  as  silly  as  Watt  may  turn  up 
with  something  quite  as  silly  as  the  steam  engine 
and  we  may  laugh  him  away  for  a  time.  Probably 
somewhere  in  the  world  and  unconfined  is  an  in- 
dividual with  a  notion  quite  as  ridiculous  as  that  a 
man  could  fly,  and  perhaps  if  he  has  any  Uterary 
neighbours  they  will  make  another  Darius  Green  out 
of  him.  There  are  quite  too  many  things  that  we  do 
not  understand  to  warrant  any  one  in  predicting 
future  limits.  But  it  is  in  the  way  of  commercial 
invention  that  the  great  progress  of  recent  years  has 


204      COMMON  SENSE  AND  LABOUR 

been  made — in  the  combining  of  the  best  minds  of 
science  with  the  best  minds  of  commerce.  The  busi- 
ness of  what  might  be  called  inventing  had  better 
be  called  investigating.  Invention  is  no  longer  in 
the  main  a  haphazard  affair,  and,  although  there  are 
plenty  of  inventors  living  in  cellars  and  garrets,  there 
are  even  more  of  them  comfortably  housed  in  well- 
equipped  laboratories  and  paid  good  salaries.  There 
are  also  the  men  who  work  independently  such  as 
Edison,  John  Hays  Hammond,  Jr.,  Tesla,  and  Hud- 
son Maxim;  those  are  names  we  know.  But  in 
the  big  laboratories  are  hundreds  of  others  who  are 
constantly  developing. 

No  modern  plant  is  considered  complete  without  a 
research  department.  The  scientists  give  part  of 
their  time  to  improving  present  processes  and  part 
to  developing  future  processes  or  designs.  The 
typewriter  concerns  are  always  working  ahead  on 
new  models;  their  objectives  are  the  minimizing 
of  weight  and  noise.  The  National  Cash  Register 
Company  is  usually  two  or  three  years  ahead  of  the 
machine  that  it  has  on  the  market;  a  large  depart- 
ment does  nothing  but  work  out  designs  to  do  what 
the  oflBcers  think  the  next  machine  should  do;  once 
they  arrive  at  a  model,  they  put  it  out  in  use  and 


COMMON  SENSE  AND  LABOUR      205 

watch  carefully  for  defects.  Then  they  fetch  it  back 
again  for  further  study  and  improvement,  until 
finally  they  achieve  a  model  that  suits — and  such  a 
model  seldom  represents  an  outlay  of  less  than  a 
million  dollars.  The  General  Electric  Company 
maintains  not  only  what  might  be  called  a  practical 
laboratory  for  development  but  also  a  laboratory 
for  purely  scientific  research — for  it  is  recognized 
that  we  are  only  on  the  threshold  of  electrical  de- 
velopment. They  are  working  constantly  not  only 
to  discover  more  about  the  properties  of  electricity 
but  also  to  find  new  and  cheaper  ways,  materials,  and 
processes. 

However  these  laboratories  may  function  in  nor- 
mal times  they  can  redouble  their  activities  under 
urgent  pressure.  Gas  masks  had  been  thought  of 
and  used  in  mines  and  the  like  before  the  war  and 
lives  depended  on  them,  but  they  had  never  stood 
between  the  life  and  death  of  a  whole  nation  as 
they  did  when  Germany  sprung  its  first  gas  attacks; 
then  nearly  perfect  gas  masks  were  invented.  For 
years  it  had  been  thought  desirable  to  have  some 
means  by  which  a  vessel  might  detect  the  approach 
of  another  in  a  fog;  after  the  Titanic  there  was  a  good 
deal  of  talk  about  some  way  of  locating  icebergs. 


206      COMMON  SENSE  AND  LABOUR 

But  it  was  not  until  the  Gennan  submarines  put  our 
nation  in  peril  that  detectors  were  evolved  that  took 
the  locating  of  a  ship  out  of  the  realm  of  the  human 
eye.  Preserving  a  nation  from  destruction  is  on  a 
different  footing  from  preserving  a  few  vessels  from 
shipwreck.  The  gyroscope,  too,  was  a  toy  until  its 
utility  in  warfare  was  demonstrated. 

And  if  we  become  desperately  short  of  labour — 
and  imless  all  signs  fail  we  shall — then  the  urge  to 
invention  or  improvement  will  be  as  great  as  that  of 
war,  but  with  this  difference:  waste  is  not  considered 
in  war,  cost  is  no  object  at  all.  In  peace,  cost  is  the 
ruling  factor  and  where  we  neglected  waste  in  war 
we  shall  now  go  forward  with  a  keen  eye  to  cost — 
to  waste  prevention.  For  we  can  get  greater  pro- 
duction with  less  men  either  by  helping  the  man 
out  with  a  machine  or  by  cutting  out  the  man's 
waste  motions  or  the  waste  in  material.  The  wise 
man  uses  all  modes — indeed,  the  modern  way  is 
first  to  see  if  you  are  getting  all  that  is  to  be  had 
out  of  what  you  have  on  hand  before  you  attempt  to 
extend. 

Look  at  a  few  of  the  opportunities  and  the  begin- 
nings of  what  can  be  accomplished.  Take  the  rail- 
roads.    The  opportunities  are  great  for  the  facilita- 


COMMON  SENSE  AND  LABOUR      207 

tion  of  traffic  through  a  better  general  average  of 
roadbeds  and  rolling  stock.  In  the  last  five  years 
the  economy  and  capacity  of  locomotives  have  been 
doubled.  But  the  big  immediate  and  comparatively 
cheap  improvement  is  in  the  terminal  handling. 
The  loading,  unloading,  and  switching  about  takes 
a  prodigious  amount  of  time  and  costs  the  services 
of  many  men.  One  has  only  to  realize  that  every 
hour  cut  off  the  movement  of  freight  means  an  hour 
of  interest  saved  on  the  money  invested  in  the  goods, 
to  estimate  that  the  actual  money  saving  in  cost  of 
transportation  is  not  all  that  is  involved.  The  great 
initial  advantage  that  gave  the  Armour  business  its 
start  was  the  recognition  by  the  late  P.  D.  Armour 
that  the  privately  owned  refrigerator  car  would  per- 
mit the  distribution  of  dressed  meat  from  a  central 
point  at  a  maximum  of  speed  and  a  minimum  of  cost. 
An  example  of  what  can  be  saved  in  handling  is  the 
plan  at  Cincinnati  where  the  Motor  Terminals  Com- 
pany has  devised  a  scheme  through  the  use  of  cranes, 
motor  trucks  with  interchangeable  bodies,  electric 
trucks  operating  in  freight  houses  and  piers,  and  the 
latest  hoisting  machinery  which  will  save  66,000 
freight  cars  now  used  exclusively  in  transfer  or  similar 
service,  and  Tsdll  save  more  than  300,000  switch-cut 


208      COMMON  SENSE  AND  LABOUR 

movements  a  year.  In  addition  the  system  will  per- 
mit a  continuous  flow  of  traflSc. 

Mechanical  loading  and  unloading  is  advancing 
quickly;  at  Locust  Point  near  Baltimore  they  have  a 
mechanism  which  unloads  bulk  material  directly 
from  the  ship  hold  into  the  box  car.  An  automatic 
belt  conveyor  capable  of  handling  twenty  cubic  feet 
an  hour  runs  the  full  length  of  the  800-foot  pier.  Li 
a  general  way  these  appliances  allow  one  man  to  do 
more  than  ten  might  do  in  the  old  manual-effort  way. 
But  brute  force  is  still  the  power  that  loads  and  un- 
loads most  of  our  ships  and  railway  trains. 

The  handling  of  the  ocean-going  craft  is  especially 
wasteful;  the  freights  are  mostly  mixed  and  therefore 
not  capable  of  standardized  handling,  but  there  is  no 
ocean  record  even  to  be  mentioned  in  the  same  breath 
with  the  achievements  on  the  Great  Lakes.  The 
record  there  is  held  by  the  steamer  Widener  which 
unloaded  10,636  gross  tons  of  ore  into  cars  in  two 
hours  and  fifty  minutes.  The  loading  record  is  held 
by  the  Corey  which  took  on  9,457  gross  tons  of  ore 
at  Superior,  Wisconsin,  in  25  minutes.  The  vessel 
docked  at  1 :40  p.  M.,  the  loading  began  at  2:43  p.  m., 
was  concluded  at  3:08  p.  M.,  and  the  boat  sailed  away 
at  3 :15  p.  M.     The  ocean  steamship  companies  are 


COMMON  SENSE  AND  LABOUR      209 

the  despair  of  the  engineers;  although  a  big  liner 
represents  an  enormous  investment  of  money  and 
it  is  of  the  highest  importance  that  all  this  money 
should  be  working  through  every  possible  minute, 
the  traditions  of  the  sea  are  so  strong  that  the  prac- 
tices of  sailing-ship  days  are  more  in  evidence  than 
the  practices  of  modern  industry.  Experts  say  that 
the  whole  matter  of  seamen's  and  stevedores'  wages 
might  easily  be  settled  if  only  the  ships  did  not  lose 
so  much  time  and  money  in  port  through  lack  of 
mechanical  facilities.  Even  under  the  stress  of  war, 
when  every  available  bottom  was  needed  to  rush 
American  troops  and  supplies  to  France,  the  addi- 
tional turnover  was  gained  mostly  through  the  use 
of  more  men  and  not  more  machinery.  But  that 
hurry  gave  an  indication  of  what  might  be  accom- 
plished. 

The  army  did  have  the  time  to  install  machinery  at 
Boston  and  Brooklyn  and  it  worked  wonders.  The 
most  interesting  features  are  the  banks  of  automatic 
elevators.  In  Brooklyn  there  are  three  banks  of 
ten  each  and  six  of  seven  each,  and  instead  of  an 
operator  to  an  elevator,  one  man  controls  each  bank 
with  ease  through  an  electrical  control  board  with 
telltale  lights  and  switches.    He  stops  and  starts 


210      COMMON  SENSE  AND  LABOUR 

the  cars,  opens  the  doors,  and  has  all  the  control 
of  the  individual  operator.  Into  these  elevators 
whisk  trains  of  power  trucks  and  trailers,  the  loads 
are  uncoupled,  and  the  drivers  go  off  for  more.  The 
human  hand  is  used  only  to  direct;  machines  do  the 
work. 

A  great  awakening  has  come  throughout  the  whole 
material-handling  industry  and,  spurred  on  by  the 
increasing  cost  and  scarcity  of  labour,  an  association 
of  manufacturers  of  such  machinery  is  conducting 
an  exchange  for  ideas  and  they  are  making  remark- 
able progress  in  what  was  once  the  most  backward 
section  of  our  industrial  effort. 

In  facihtating  the  movement  of  people  is  another 
field  of  great  opportmiity.  It  is  impossible  to 
reckon  the  cost  of  the  time  lost  in  traversing  great, 
useless  architectural  stretches  of  railway  stations, 
waiting  around  for  crowded  elevators,  and  ascending 
or  descending  unnecessary  stairways.  Little  or  no 
thought  seems  to  have  been  given  to  the  waste  of 
human  time  and  energy  in  the  design  of  many  of  our 
railroad  and  subway  terminals,  and  even  where  eleva- 
tors or  moving  stairways  are  provided,  a  flight  of  steps 
or  two  is  usually  added  to  prevent  the  human  muscles 
from  getting  soft.     And  I  have  never  seen  the  mov- 


COMMON  SENSE  AND  LABOUR      211 

ing  stairway  used  here  for  descending — ^they  so  use 
them  in  England.  Another  device  much  used  in 
Germany  and  not  at  all  in  vogue  here  is  the  endless 
chain  elevator  with  open  cars  always  in  motion,  and 
in  and  out  of  which  the  people  seem  to  hop  with  ease. 
They  save  men  and  they  save  time  in  a  building  of 
less  than  ten  stories  in  height;  although  the  open 
ears  seem  dangerous  and  would  probably  be  used 
here  to  bankrupt  the  accident  insurance  companies,  I 
could  not  discover  that  they  were  sources  of  accidents 
in  Germany. 

It  is  romantic  to  speculate  what  the  airplane  will 
do  in  transportation  (and  undoubtedly  it  will  do  a 
great  deal  especially  in  the  way  of  moving  the  mails) 
but  the  big  economic  values  are  in  saving  time  on 
masses  of  men  and  materials. 

When  we  get  into  industry,  the  savings  in  time  or 
the  extension  of  the  power  of  men  are  easier  to  visual- 
ize. Charles  P.  Steinmetz  calculates  that  in  the 
last  century  the  use  of  power  and  machinery  has 
multiplied  the  per  man  productive  power  of  the  coun- 
try by  ten.  That  is,  one  man  is  now  worth  as  much 
in  a  productive  way  as  ten  were  when  Madison  was 
president.  There  are  a  million  harvesters  in  use 
throughout  the  country  and  it  would  take  at  least 


212      COMMON  SENSE  AND  LABOUR 

two  men  to  do  the  work  of  one  man  and  a  machine. 
There  is  a  saving  of  a  million  men  right  off.  Going 
back  beyond  the  harvester  into  the  days  of  the  hand 
scythe  and  flail,  probably  the  entire  working  popula- 
tion of  the  country  could  not  harvest  the  present 
annual  grain  crop.  And  now  looms  up  the  little 
farm  tractor  already  cutting  into  the  need  for  man 
power  and  it  is  expected  that  soon  it  will  be  perfected 
to  a  point  where,  at  a  moderate  first  cost,  it  will  be 
able  to  exert  the  power  for  almost  any  job  around  the 
farm.  And  I  am  not  taking  into  accoimt  the  man- 
saving  power  of  the  farmer's  Ford  which  lets  him  do 
in  an  hour  or  two  what  formerly  took  him  the  entire 
day.  The  modern  farm  buildings,  with  the  shortage 
of  help,  are  beginning  to  be  arranged  to  save  foot- 
steps and  also  to  be  equipped  with  simple  labour- 
saving  devices.  The  agricultural  machinery  was 
sold  to  the  farmer  with  a  deal  of  difficulty,  and  it  is 
only  lately  that  he  has  understood  that  time  might 
also  be  saved  by  the  more  sequential  arrangement  of 
processes  as  well  as  by  machinery. 

It  is  impossible  to  turn  anywhere  without  finding  la- 
bour-saving devices;  the  shortage  of  help  has  brought 
in  the  mechanical  home  laundry;  the  dish- washing 
machine,   and   other  electrical  devices   promise  to 


COMMON  SENSE  AND  LABOUR      213 

make  the  self-service  home  feasible,  and  attention  is 
now  being  given  to  the  designing  of  the  whole  house 
on  the  principle  of  easy  attendance.  For  no  perverse 
genius  could  hope  consciously  to  design  such  a  model 
of  inconvenience  as  the  average  house.  It  is  still 
in  the  era  when  servants  were  cheaper  than  imple- 
ments. 

In  unskilled  labour,  the  machine  is  displacing  the 
man;  if  a  big  ditch  is  to  be  dug,  we  have,  instead  of 
a  file  of  foreigners,  an  automobile  trench  machine 
which  breaks  the  earth,  lifts  it  out,  and  puts  it  into 
automatic  dumping  motor  trucks.  Out  in  Iowa  a 
contractor  on  a  hotel  was  faced  with  a  lack  of  com- 
mon labour  for  the  concrete  work;  he  got  in  touch 
with  a  designer  and  they,  within  a  few  days,  worked 
out  an  automatic  arrangement  so  that  not  a  bit  of 
the  sand,  gravel,  and  cement  had  to  be  touched 
with  a  shovel.  In  a  few  large  sawmills  convey- 
ors have  taken  the  place  of  the  turbulent  huskies 
and  the  logs  go  from  the  cars  right  through  the  mills 
without  being  touched  by  hand.  There  is  mining 
machinery  in  plenty  to  be  had  but  only  about  half 
of  our  coal  is  mined  by  machine;  mining  is  in  many 
respects  (and  for  sound  economic  reasons)  probably 
our  most  backward  industry.     If  a  conference  be- 


214       COMMON  SENSE  AND  LABOUR 

tween  the  owners  and  miners  took  place  to  improve 
the  industry  instead  of  to  row  over  wages,  the  wages 
would  probably  care  for  themselves  and  so  would 
the  owners'  profits  and  the  public's  price. 

The  cleaning  of  the  hair  from  the  surface  of  skins 
in  the  process  of  getting  leather  used  to  be  a  long, 
tedious  process;  now  a  machine  will  do  in  a  second 
what  formerly  took  hours  of  hand  time.  A  heavy 
piece  of  leather  is  commonly  split  into  several  thick- 
nesses for  lighter  uses;  this  was  once  a  skilled  hand 
job,  for  a  slip  would  spoil  the  skin;  now  swiftly  mov- 
ing knives  will  split  the  most  irregular  pieces  with 
never  a  shp.  And  so  on  through  nearly  every  proc- 
ess of  working  leather,  the  machine  has  taken  the 
place  of  the  hand.  Our  automatic  shoe  machinery 
is  famous  the  world  over  and  is  constantly  being 
improved. 

And  then  there  are  no  end  of  simple  changes  that 
together  make  for  vast  sa\4ngs.  A  woollen  manu- 
facturer employed  five  men  with  axes  to  break  out 
the  frozen  bales  as  they  came  in.  It  was  hard  work. 
An  engineer  interrupted  the  terrific  hacking  by 
putting  in  a  hose  throwing  a  jet  of  Hve  steam  which, 
thrust  into  a  bale,  thaws  it  out  in  a  few  minutes;  one 
man  now  does  more  than  the  five  did.    By  the  al- 


COMMON  SENSE  AND  LABOUR      215 

most  self-evident  plan  of  having  a  pressman  bore 
three  pieces  of  metal  at  a  time  instead  of  one, 
that  pressman  became  nearly  three  times  as  valuable. 
By  so  planning  the  course  of  goods  through  a  factory 
that  there  will  be  no  pools  and  eddies  whereby  valu- 
able material  is  held  back,  enormous  sums  are  often 
saved.  A  striking  instance  that  comes  to  mind  is 
the  coordination  of  stocks  and  operations  in  one  mill 
that  ordinarily  had  four  million  dollars  tied  up  in 
goods  in  process,  so  that  with  the  same  output  only 
one  million  dollars  was  at  any  one  time  in  use — 
which  not  only  gave  that  company  three  million 
dollars  right  out  of  the  sky,  but  decreased  their 
annual  costs  by  the  interest  on  that  large  amount. 
In  an  underwear  factory  a  hand  operation  was 
thought  not  worth  bothering  with  because  it  cost 
only  four  cents  a  dozen  garments;  an  investigation 
showed  that  in  addition  to  the  four  cents  a  quarter 
of  an  inch  of  material  was  also  wasted;  they  designed 
a  machine  to  do  the  work  and  turned  up  with  a  sav- 
ing of  $7,500  a  year — out  of  something  not  worth 
bothering  about! 

But  the  subject  of  waste  is  one  all  of  itself;  we 
waste  at  least  one  quarter  of  the  coal  we  buy  by  bad 
firing;  we  waste  an  untold  amount  of  power  through 


216      CO]M]MON  SENSE  AND  LABOUR 

not  using  the  forces  contained  in  our  streams.  A 
manufactured  article  just  about  doubles  in  price 
between  the  producer  and  the  consumer  buying  at 
retail  and  that  without  any  one  getting  much  of  a 
profit  on  the  journey — in  spite  of  all  the  talk  about 
profiteering. 

I  have  tried  to  indicate  a  mere  fraction  of  the  econ- 
omies of  man  power  that  are  being  made  to-day  and 
from  them  to  suggest  something  of  the  economies 
which  are  possible — although  circumstances  rather 
than  vision  will  ultimately  determine.  One  can  say 
in  a  rough  way  that  probably  we  can  at  least  double 
our  productivity  within  the  next  five  years  if  the 
w^ll  to  work  is  present.  DoubHng  our  productivity 
will  double  wages.  But  those  wages,  curiously 
enough,  w^ill  have  to  be  increased  in  spite  of  the  cur- 
rent agitation  for  higher  wages  and  not  because  of  it. 
The  whole  trend  to-day  is  in  the  w^ay  of  raising  wages 
as  expressed  in  dollars  and  depressing  them  in  point 
of  real  buying  power — which  is  the  inevitable  result 
of  wages  w^ithout  skilled  and  willing  work.  The 
Sixty-Third  Congress,  in  the  thought  that  it  was 
playing  up  to  the  labour  vote,  tacked  to  several  ap- 
propriation bills  prohibitions  against  the  use  of  tne 
stop-watch  in  any  of  the  work  thus  provided.     They 


COMMON  SENSE  AND  LABOUR      217 

thought  that  they  were  guarding  against  the  econom- 
ical spending  of  the  people's  money  and  insuring  the 
favoured  worker  of  a  day's  pay  without  a  day's  work 
— after  the  benevolent  manner  of  politicians  in  deal- 
ing with  the  taxpayers'  funds.  But  without  time 
studies  the  individual  worker  can  never  learn  how  to 
use  his  hand  and  brain  to  the  best  advantage  and 
therefore  Congress,  utterly  ignorant  of  the  process 
of  industry  and  yielding  to  clamour,  in  effect  decreed 
that  men  employed  by  the  Government  should  not 
increase  in  skill  and  make  themselves  capable  of 
earning  larger  wages ! 

The  shortage  of  labour  need  have  no  terrors  for 
Americans;  it  should  operate  toward  cheaper  goods 
and  higher  wages.  But  the  elimination  of  waste 
and  the  extension  of  power  will  require  different 
and  larger  organizations.  The  expensive  labour- 
saving  device  is  not  for  the  man  with  a  small  amount 
of  business,  the  economies  of  distribution  are  not 
for  the  corner  grocery.  To  pay  high  wages  and 
justify  large  machine  expenditures  we  need  large 
productive  units — otherwise  there  is  not  the  produc- 
tion out  of  which  to  pay  the  charges.  Large  produc- 
tive units  arise  only  from  the  accumulations  of 
capital,  and  these  accumulations  arise  only  from  prof- 


218      COMMON  SENSE  AND  LABOUR 

its.  And  while  the  welfare^  of  the  country  and  the 
worker  demand  the  results  which  can  thus  come  only 
from  profits,  the  country  and  the  worker  also  demand 
from  time  to  time  that  there  shall  be  no  profits. 
Which  leaves  us  just  where  we  started ! 


CHAPTER  NINE* 

THE  METHODS  AND  POLICIES  OF  BRITISH  LABOUR 

The  better  class  of  American  worker  considers 
himself  a  potential  manager  or  superintendent;  the 
same  class  of  British  worker  looks  forward  to  being 
always  a  worker.  The  American  workman  commonly 
considers  his  acts  as  individual  and  expects  rewards 
as  an  individual,  without  paying  much  attention 
to  what  his  fellows  are  getting;  the  British  worker 
considers  himself  one  of  a  class  and  will  usually  refuse 
any  individual  benefit  that  is  not  also  conferred  upon 
his  fellows — ^he  is  even  apt  to  resent  the  proposal 
as  one  tending  to  alienate  him  from  his  fellows.  If  an 
American  worker  thinks  he  is  being  treated  unfairly 
or  if  a  wage  increase  is  refused,  he  will  quit  his  job; 
the  British  worker  will  not  leave  his  job — ^he  will 
tell  his  fellow  employees  about  the  trouble  and  they 
will  at  once  adopt  his  grievance  as  their  own  and  pre- 
sent a  united  front  against  the  employer.     Instead 


*Reprinte<l  from  Factory,  the  Magaaim  of  Managtnunt,  by  permusion  of  A.  W.  Shaw 
Company. 

210 


220      COMMON  SENSE  AND  LABOUR 

of  leaving  for  another  job  the  aggrieved  employee 
will  probably  be  able  to  start  a  strike. 
K  English  workers  will  go  on  strike  with  even  less 
I  provocation  than  it  takes  to  cause  an  American  to 
quit  his  job.  The  manager  of  an  engine  factory  in 
Manchester  told  me  that  he  expected  a  strike  at  least 
once  every  fortnight  and  another  manager  said  that 
when  he  started  a  tour  of  the  works  he  was  never 
quite  sure  that  he  would  not  come  upon  a  strike  some- 
where during  the  trip.  In  America  we  think  of  a 
strike  as  a  serious  affair  involving  great  economic 
loss;  there  are  very  great  strikes  in  England  but  for 
every  big  strike  there  are  a  thousand  small  strikes 
which  may  last  anywhere  from  ten  minutes  to  an 
hour.  The  British  worker  carries  a  chip  upon  his 
shoulder  and  the  slightest  puff  of  wind  will  take  it  off; 
no  matter  what  takes  it  off,  the  employer  is  to  blame 
and  the  strike  is  the  imiversal  reply  to  the  employer. 
"If  I  post  a  notice,"  said  a  works  manager  to  me, 
"and  the  men  do  not  understand  it  or  do  not  like  it, 
they  will  instantly  go  on  strike.  I  have  posted  a 
notice  at  ten  in  the  morning  and  at  ten  minutes  past 
ten  have  found  the  entire  force  filing  out  of  the  gate 
on  their  way  to  hold  a  meeting  and  pass  resolutions." 
As  an  instance  of  the  trivial  nature  of  some  strikes 


COMMON  SENSE  AND  LABOUR      S21 

the  aftermath  of  the  forty-seven -hour  week  settlement 
in  1918  is  interesting.  The  British  worker  was  ac- 
customed to  a  long  day — ^he  started  at  five  or  six  in 
the  morning,  had  a  break  at  eight  or  nine  for  break- 
fast, another  at  twelve  or  one  for  lunch,  and  a  tea  break 
at  half -past  four  or  five.  Under  the  forty-seven  and 
forty-four-hour  week  schedules  which  include  Satur- 
day half  holidays,  the  employers  took  it  for  granted 
that  the  men  would  have  their  breakfasts  before  they 
left  home  and  they  arranged  for  a  single  break  in  the 
day  for  the  lunch  hour.  At  once  a  violent  agitation 
developed.  Some  men  declared  that  they  were 
unable  to  eat  early  in  the  morning  and  that  the  long 
wait  until  the  lunch  hour  had  a  serious  effect  upon 
their  physical  well  being.  Others  stated  that  their 
wives  refused  to  prepare  breakfast  and  they  had  to 
come  to  work  hungry.  Still  others  asked  that  the 
day  start  as  early  in  the  morning  as  before  but  that 
the  stopping  time  be  advanced — ^they  had  become 
accustomed  to  early  rising  and  did  not  like  to  change 
their  habits.  Again  a  misunderstanding  arose  as  to 
whether  the  eight-hour  day  meant  eight  hours  of 
work  or  eight  hours  between  the  starting  and  the 
stopping  time — a  net  work  period  of  seven  hours. 
All  of  these  seem  to  be  trivial  questions  except  as  to 


222      COMMON  SENSE  AND  LABOUR 

the  actual  length  of  the  eight-hour  day  which  it  might 
be  imagined  would  have  been  fixed  at  the  time  of 
settlement,  but  the  regulations  were  the  subject  of 
dozens  of  small  strikes  and  a  national  strike  was 
threatened. 

All  over  the  country  employees  were  discussing 
w^th  the  utmost  gravity  the  matter  of  whether  or 
not  it  was  humanly  possible  for  a  man  to  have  break- 
fast before  he  started  to  work! 

British  workers  are  extraordinarily  punctilious — 
but  so  are  the  employers.  The  worker  has  fought 
his  way  up  from  a  position  of  nearly  complete  degra- 
dation and  he  is  very  suspicious.  Employers  differ 
in  popularity,  but  their  individual  popularity  has 
but  little  effect  upon  the  working  relation  except 
in  specialty  trades  where  the  workers  are  not  drawn 
from  the  general  mass.  For  instance,  no  matter 
what  wages  are  paid  or  what  the  good  feeling  between 
master  and  man,  no  clerk  would  work  one  minute 
after  one  o'clock  on  Saturday,  at  which  time  the  law 
says  the  working  week  ends.  It  is  practically  impos- 
sible to  buy  anything  in  a  shop  after  a  quarter  to  one 
on  Saturday,  for  the  people  are  then  arranging  so 
that  the  closing  can  take  place  on  the  exact  minute 
with  all  stock  replaced. 


J\ 


COMMON  SENSE  AND  LABOUR      223 

The  feeling  that  the  employee  is  one  sort  of  an 
animal  and  the  employer  another  grows  from  the 
intense  class  consciousness  of  the  employed.  One 
cannot  at  all  comprehend  British  labour  unless  this 
class  feeling  is  recognized;  the  feeling  may  or  may 
not  be  respectful — as  a  rule  it  is  respectful,  for  the 
English  like  to  have  someone  different  from  them- 
selves over  them.  They  do  not  like  a  show  of  equal- 
ity on  the  part  of  the  employer,  but  prefer  condescen- 
sion if  it  has  a  basis  in  breeding  and  is  well  carried 
ofF. 

Because  the  Britisher  does  not  mind  being  classed 
as  a  worker  he  is  open  to  political  treatment  in  mass 
— ^that  is  if  he  is  a  manual  worker.  The  class  idea 
has  infinite  sub-divisions;  the  bank  clerk  is  the  aris- 
tocrat and  thinks  nothing  of  the  ordinary  clerk, 
who  in  turn  will  have  no  part  with  the  sales  clerk. 
The  factory  workers,  too,  have  their  class  distinc- 
tions among  themselves,  but  they  will  present  a 
united  front  upon  occasion.  They  have  the  common 
bond  of  being  against  the  employer  and  hence  they  \ 
are  far  stronger  destructively  than  constructively.  \ 
The  skilled  man,  however,  will  seldom  make  common 
cause  with  the  unskilled  unless  a  common  interest  is 
affected. 


\ 


224      COMMON  SENSE  AND  LABOUR 

Such  is  the  background  of  English  labour.  It  is 
unthinkable  to  the  working  mind  that  an  employer 
can  desire  to  be  fair  or  to  make  money  other  than 
by  bearing  down  on  employees — we  must  remember 
that  England  is  not  so  very  far  away  from  the  intoler- 
able conditions  that  once  obtained  in  the  Lanca- 
shire cotton  mills.  The  slums  of  London,  Liverpool, 
and  Glasgow  are  still  among  the  worst  in  the  world. 
And  also  it  is  well  within  the  memory  of  many  work- 
ers when  the  common  man  had  precious  little  to  say 
about  how  the  coimtry  was  governed.  The  employer 
and  employee  approach  each  other  in  a  spirit  of  hos- 
tility and  without  the  slightest  faith  in  the  spoken 
word;  they  are  each  prepared  to  bargain  for  an  advan- 
tage and,  when  the  bargain  has  been  arrived  at,  to  put 
it  down  on  paper,  each  with  the  hope  that  some  way 
of  evading  it  may  later  turn  up.  This  is  not  the  uni- 
versal attitude,  but  it  is  the  general  attitude.  A 
few  leaders  on  both  sides  see  beyond  the  immediate 
discussion  and  note  the  frightful  waste  in  barter. 

The  worker,  having  nothing  in  common  with  the 
employer,  has  accepted  the  philosophy  that  the  less 
work  one  does  the  more  work  there  will  be  to  do.  He 
resists  every  improvement  in  machinery  and  every 
speeding  or  scientific  process  which  will  tend  to  put 


COMMON  SENSE  AND  LABOUR      225 

through  work  in  a  shorter  time  or  with  less  men.  He 
repHed  to  piece-rate  payments  by  setting  up  exact 
rules  as  to  how  much  a  man  might  do  in  a  given  time 
— a  man  must  not  do  more.  He  asks  for  shorter 
and  shorter  hours,  not  so  much  that  he  wants  the 
leisure  as  to  make  work  for  his  fellows,  and  he  cares 
not  a  jot  as  to  where  or  how  the  employer  finds 
the  money  for  higher  wages.  In  short,  the  employee 
is  concerned  only  with  what  he  and  his  fellows  get 
out  of  industry;  the  employer  is  considered  as  being 
well  able  to  care  for  himself. 

The  class  feeling  readily  translated  itself  into  poli- 
tics when  the  trades  union  movement  gained  ground. 
All  trades  unions  have  political  tenets;  some  of  them 
are  foimded  upon  public  ownership,  some  have  as  an 
end  the  control  of  industry.  They  have  not  all  the 
same  poHtical  aims,  but  they  all  have  some  political 
aims  and  they  are  able  more  or  less  to  subordinate 
their  differences  in  a  political  movement  imder  the 
general  caption  of  the  "Labour  Party."  This  party 
has  now  its  various  sections,  and  they  will  come  up 
later  in  this  article.  Labour  leaders  now  usually 
have  political  offices  as  well  as  imion  places;  they  will 
he  town  councillors.  Members  of  Parliament  or 
even,  since  the  war,  Cabinet  Ministers.    And  they 


/ 


226      COMMON  SENSE  AND  LABOUR 

are  by  no  means  always  woi-kmen.  Philip  Snowden, 
for  instance,  is  a  journalist  and  so  is  Ramsay  Mac- 
Donald;  others  like  the  Rt.  Hon.  J.  C.  Clynes,  lately 
IViinister  of  Food,  came  up  from  the  ranks. 

The  trades  union  movement  has  grown  rapidly 
since  1913  and  now  about  1,200  unions  exist,  cover- 
ing almost  every  branch  of  trade  and  with  a  present 
membership  of  nearly  6,000,000,  which  represents  an 
increase  of  about  a  third  since  1913.  An  English 
employer  must  nowadays  deal  with  a  union  and  not 
with  his  employees  as  individuals.  The  employers 
found  themselves  at  a  disadvantage  in  bargaining 
with  unions  and  hence  they,  too,  in  many  trades  and 
more  particularly  in  the  engineering  trades  (the 
English  engineer  corresponds  nearly  to  our  machin- 
ist), organized  employers'  associations  with  national, 
district,  and  local  organizations  to  treat  with  unions. 
The  workers  put  out  of  their  hands  the  power  to  ad- 
just wages  and  the  employers  replied  by  doing  the 
same  thing.  Hence  wages  and  hours  of  work  are 
not  individual  matters;  they  are  fixed  by  the  repre- 
sentatives of  the  employers  and  employees  after 
elaborate  dickering.  When  they  do  fix  a  wage  or  a 
working  time  it  goes  down  into  an  agreement  forth- 
with and  since  one  factory  may  have  in  it  a  dozen 


COMMON  SENSE  AND  LABOUR      227 

or  more  unions  it  is  usual  to  make  a  joint  agreement 
covering  all  the  unions  represented.  These  treaties 
are  bound  and  published  and  naturally  vary  in 
intricacy.  Here  is  about  an  average  one;  it  is 
taken  from  the  Birmingham  district: 

WORKING  CONDITIONS 

BETWEEN  THE 
BiBMINGHAM     AND     DISTRICT     ENGINEERING     EmPLOYBRS' 

Association 
(federated  with  the  engineering  employers*  federation) 

AND 

The  Engineering  Trades  Unions 

1.  THE  AGREEMENT  between  The  Engineering  Employ- 
ers' Federation  and  The  Amalgamated  Society  of  En- 
gineers, The  Steam  Engine  Makers'  Society  and  The 
United  Machine  Workers'  Association,  dated  1st  October, 
1907,  forms  the  basis  of  THIS  AGREEMENT,  and  is  an  in- 
tegral part  hereof,  together  with  any  other  Agreement  which 
may  hereafter  be  arrived  at  between  the  said  Engineering 
Employers'  Federation  and  the  Amalgamated  Society  of 
Engineers,  the  Steam  Engine  Makers'  Society  and  the  United 
Machine  Workers'  Association. 

2.  Work  Hours.  Not  more  than  53  Hours  shall  constitute  a 
full  Week's  work  throughout  the  District,  and  any  Hours 
worked  in  excess  of  the  said  53  Hours  shall  be  paid  for  as 
Overtime  at  the  rates  laid  down  hereunder. 

8.  Overtime.  The  rate  of  Wages  paid  for  Overtime,  after  making 
due  allowance  for  sickness  and  idleness  enforced  by  the  Em- 
ployer, shall  be  as  follows: — 

(a)  For  time  not  exceeding  Four  Hours  in  any  One  Day 
Time-and-One-Quarter;     provided     always    that    no 


228      COMMON  SENSE  AND  LABOUR 

Overtime  shall  be  paid  for  until  the  full  recognized 
hours  have  been  worked  during  the  week  in  question, 
(b)  For  time  exceeding  Four  Hours  in  any  One  Day,  Time- 
and-One-Half;  provided  always  that  this  rate  shall 
not  be  paid  until  the  number  of  hours  represented  by 
an  ordinary  Day  and  Four  Hours'  Overtime  have  been 
worked  during  the  day  in  question. 

4.  Night  Shifts.  The  recognized  Hours  for  Night  Shifts  are 
to  be  10  per  Night  and  50  per  Week,  counting  from  Monday 
Evening  until  Saturday  Morning,  and  the  Hourly  rate  of 
Wages  therefor  shall  be  Time-and-a-Quarter,  calculated  on  the 
Day  Rates.  For  all  time  worked  in  excess  of  50  Hours  in  any 
Week  payment  shall  be  made  at  the  rate  of  Time-and-a-Quarter 
on  the  Time-and-a-Quarter  rate.  Men  working  during  the 
Day  and  required  to  change  to  Night  Shift  must  be  paid  for 
the  First  Night  as  if  for  Overtime,  and  not  Night-Shift  rate. 

5.  Oui-Workers.  Out- Workers  employed  for  more  than  4| 
Hours  from  the  Factory,  but  reaching  home  before  12  mid- 
night, shall  be  paid  One  Shilling  per  Day  or  part  of  a  Day  extra. 
If  employed  after  Midnight,  or  if  unable  to  return  home 
for  any  Night,  the  payment  shall  be  2/6  per  Day.  The 
actual  time  of  travelling  to  and  fro  shall  be  paid  for  at  the 
ordinary  rate  of  Wages  laid  down  in  these  Rules  in  addition 
to  travelling  expenses. 

6.  Sunday  Work.  Except  when  working  on  Employers'  own 
plant  (which  shall  be  at  the  rate  of  Time-and-a-Half).  Sun- 
day work  shall  be  paid  for  Double  Time.  For  the  purpose 
hereof,  Christmas  Day,  Boxing  Day,  Easter  Monday,  Whit- 
Monday,  the  first  Monday  in  August,  and  any  special  statutory 
Bank  Holiday  shall  be  counted  as  Sunday.  An  employer 
may,  by  giving  statutory  notice,  substitute  another  day  for 
any  of  the  aforementioned  holidays.  Reasonable  leave  of 
absence  being  granted  where  possible. 


COMMON  SENSE  AND  LABOUR      229 

7.  Patternmakers.  When  leaving  their  employment.  Pattern- 
makers shall  be  allowed  Two  Hours  for  Tool  Grinding,  which 
shall  be  paid  for  at  the  current  rates. 

Agreed  to 
The  Birmingham  and  District  Engineering  Employers' 
Association,  on  the  one  part, 

AND 

The  Amalgamated  Society  of  Engineers, 

Steam  Engine  Makers'  Society, 

Amalgamated  Society  of  Toolmakers, 

United  Machine  Workers'  Association, 

Electrical  Trades  Union, 

Associated  Blacksmiths'  and  Ironworkers'  Society, 

Amalgaala-ted  Society  of  Smiths  and  Strikers, 

Boiler  Makers',  Iron  and  Steel  Ship  Builders'  Society, 

Friendly  Society  of  Ironfounders, 

National  Society  of  Amalgamated  Brass-workers  and 

Metal  Mechanics, 
Scientific  Instrument  Makers'  Trade  Society, 
United  Patternmakers'  Association, 
Amalgamated  Society  of  Coremakers. 

AGREEMENT 

between 

The  Engineering  Employers*  Federation 

and 

The  Engineering  Trade  Unions 

1st  October,  1907 

London 
24,  Abingdon  Street,  S.W. 

AGREEMENT  made  this  1st  day  of  October,  1907,  between 
The  Engineering  Employers'  Federation  (hereinafter  called 


230       COIVIMON  SENSE  AND  LABOUR 

the  "Federation")  of  the  one  part,  and  The  Amalgamatwd 
SociETT  OF  Engineers,  The  Steam  Engine  Makers'  Societt, 
and  The  United  Machine  Workers'  Association  (hereinafter 
called  the  "Trade  Unions")  of  the  other  part. 

The  Federation  on  the  one  hand,  and  the  Trade  Unions  on 
the  other,  bemg  convinced  that  the  interests  of  each  will  be  best 
served,  and  the  rights  of  each  best  maintained,  by  a  mutual  agree- 
ment, hereby,  with  a  view  to  avoid  friction  and  stoppage  of  work, 
agree  as  follows: — 

1.  General  Principles  of  Employment.  The  Federated  Em- 
ployers shall  not  interfere  with  the  proper  functions  of  the  Trade 
Unions,  and  the  Trade  Unions  shall  not  interfere  with  the  Em- 
ployers in  the  management  of  their  business. 

2.  Employment  of  Workmen.  Every  Employer  may  belong 
to  the  Federation,  and  every  Workman  may  belong  to  a  Trade 
Union  or  not,  as  either  of  them  maj"  think  fit. 

Every  Employer  may  employ  any  man,  and  every  Workman 
may  take  employment  with  any  Employer,  whether  the  Workman 
or  the  Employer  belong  or  not  to  a  Trade  Union  or  to  the  Feder- 
ation respectively. 

The  Trade  Unions  recommend  all  their  Members  not  to 
object  to  work  with  non-Union  Workmen,  and  the  Federation 
recommend  all  their  Members  not  to  object  to  employ  Union 
Workmen  on  the  ground  that  they  are  Members  of  a  Trade 
Union. 

No  W^orkman  shall  be  required,  as  a  condition  of  employment, 
to  make  a  declaration  as  to  whether  he  belongs  to  a  Trade  Union 
or  not. 

3.  Piecework.  Employers  and  their  Workmen  are  entitled 
to  work  Piecework,  provided: — 

(a)  The  prices  to  be  paid  shall  be  fixed  by  mutual  arrange- 
ment between  the  Employer  and  the  Workman  or  Work- 
men who  perform  the  task. 


COMMON  SENSE  AND  LABOUR      «31 

(b)  Each  WorkmAn'i  day  rate  to  be  guaranteed  irrespec- 
tively of  his  piecework  earnings. 

(c)  Overtime  and  nightshift  allowances  to  be  paid  in  ad- 
dition to  piecework  prices  on  the  same  conditions  as 
already  prevail  in  each  workshop  for  timework. 

All  balances  and  wages  to  be  paid  through  the  Ojffice. 

4.  Overtime.  The  Federation  and  the  Trade  Unions  are  agreed 
that  systematic  overtime  is  to  be  deprecated  as  a  method  of  pro- 
duction, and  that  when  overtime  is  necessary  the  following  is 
mutually  recommended  as  a  basis,  viz. : — 

That  no  Union  Workman  shall  be  required  to  work  more  than 
32  hours'  overtime  in  any  four  weeks  after  full  shop  hours  have 
been  worked,  allowance  being  made  for  time  lost  through  sick- 
ness, absence  with  leave,  or  enforced  idleness. 

In  the  following  cases  overtime  is  not  to  be  restricted: — 

Breakdown  work,  repairs,  replacements  or  alterations  for 
the  employers  or  their  customers. 

Trial  trips  and  repairs  to  ships. 

Urgency  and  emergency. 

5.  Rating  of  Skilled  Workmen.  Employers  have  the  right  to 
employ  Workmen  at  rates  of  wages  mutually  satisfactory  to  the 
Employer  and  the  Workman,  or  Workmen,  concerned. 

In  fixing  the  rates  of  skilled  Workmen,  the  Employer  shall  have 
regard  to  the  rates  prevailing  in  the  district  for  fully  trained  and 
skilled  men. 

Unions,  while  disclaiming  any  right  to  interfere  with  the  wages 
of  Workmen  other  than  their  own  Members,  have  the  right 
in  their  collective  capacity  to  arrange  the  rate  of  wages  at  which 
their  Members  may  accept  work. 

,  General  alterations  in  the  rates  of  Wages  in  any  district  shall 
be  negotiated  between  the  Employers*  Local  Association  and  the 
Local  Representatives  of  the  Trade  Union  or  Unions  concerned. 

6.  Apprentices.    There  shall  be  no  recognized  proportion  of 


232      COMMON  SENSE  AND  LABOUR 

apprentices  to  journeymen,  but  it  shall  be  open  to  the  Unions  to 
bring  forward  for  discussion  the  proportion  of  apprentices  gen- 
erally employed  in  the  whole  Federated  area. 

An  apprentice  shall  be  afforded  facilities  for  acquiring  a  prac- 
tical knowledge  of  the  branch  of  trade  he  adopts,  and  shall  be 
encouraged  to  obtain  a  theoretical  knowledge  thereof  as  far  as 
circumstances  permit. 

7.  Selection,  Training,  and  Employment  of  Operatives  and  Man- 
ning of  Machine  Tools.  Employers  have  the  right  to  select,  train, 
and  employ  those  whom  they  consider  best  adapted  to  the  various 
operations  carried  on  in  their  workshops,  and  to  pay  them  accord- 
ing to  their  ability  as  Workmen. 

Employers,  in  view  of  the  necessity  of  obtaining  the  most 
economical  production,  whether  by  skilled  or  unskilled  Workmen, 
have  full  discretion  to  appoint  the  men  they  consider  suitable  to 
work  all  their  machine  tools,  and  to  determine  the  conditions 
under  which  they  shall  be  worked. 

The  Federation  recommend  their  Members  that,  when  they 
are  carrying  out  changes  in  their  workshops  which  will  result  in 
displacement  of  labour,  consideration  should  be  given  to  the  case 
of  the  Workmen  who  may  be  displaced,  with  a  view,  if  possible, 
of  retaining  their  services  on  the  work  affected,  or  finding  other 
employment  for  them. 

8.  Provisions  for  Avoiding  Disputes.  With  a  view  to  avoid 
disputes,  deputations  of  W^orkmen  shall  be  received  by  their 
Employers,  by  appointment,  for  mutual  discussion  of  any  ques- 
tion in  the  settlement  of  which  both  parties  are  directly  concerned; 
or,  it  shall  be  competent  for  an  official  of  the  Trade  Union  to  ap- 
proach the  Local  Secretary  of  the  Employers'  Association  with 
regard  to  any  such  question;  or,  it  shall  be  competent  for  either 
party  to  bring  the  question  before  a  Local  Conference  to  be  held 
between  the  Local  Association  of  Employers  and  the  Local 
Representatives  of  the  Trade  Unions. 


COMMON  SENSE  AND  LABOUR      233 

In  the  event  of  either  party  desiring  to  raise  any  question,  a 
Local  Conference  for  this  purpose  may  be  arranged  by  applica- 
tion to  the  Secretary  of  the  Employers'  Association,  or  of  the 
Trade  Union  concerned,  as  the  case  may  be. 

Local  Conferences  shall  be  held  within  twelve  working  days 
from  the  receipt  of  the  application  by  the  Secretary  of  the  Em- 
ployers* Association,  or  of  the  Trade  Union  or  Trade  Unions 
concerned. 

Failing  settlement  at  a  Local  Conference  of  any  question 
brought  before  it,  it  shall  be  competent  for  either  party  to 
refer  the  matter  to  the  Executive  Board  of  the  Federation  and 
the  Central  Authority  of  the  Trade  Union  or  Trade  Unions 
concerned. 

Central  Conferences  shall  be  held  at  the  earliest  date  which 
can  be  conveniently  arranged  by  the  Secretaries  of  the  Federa- 
tion and  of  the  Trade  Union  or  Trade  Unions  concerned. 

There  shall  be  no  stoppage  of  work,  either  of  a  partial  or  of  a 
general  character,  but  work  shall  proceed  under  the  current  con- 
ditions until  the  procedure  provided  for  above  has  been  carried 
through. 

9.  Constitution  of  Conference.  An  Organizing  Delegate  of  the 
Amalgamated  Society  of  Engineers  shall  be  recognized  as  a 
Local  Official  entitled  to  take  part  in  any  Local  Conference,  but 
only  in  his  own  division.  In  case  of  sickness,  his  place  shall  be 
taken  by  a  substitute  appointed  by  the  Executive  Council. 

Any  member  of  the  Executive  Council,  or  the  General  Secre- 
tary of  the  Amalgamated  Society  of  Engineers,  may  attend  Local 
Conferences,  provided  that  the  member  of  the  Executive  Council 
shall  attend  only  such  Conferences  as  are  held  within  the  division 
represented  by  him. 

A  member  of  the  Executive  Council,  or  the  General  Secretary 
of  the  Steam  Engine  Makers'  Society  and  of  the  United  Machine 
Workers'  Association  respectively,  may  attend  any  Local  Con- 


234       COMMON  SENSE  AND  LABOUR 

fcrence  in  which  the  Societies,  or  \3ither  of  them,  ajre  directly 
concerned. 

Central  Conferences  shall  be  composed  of  members  of  the  Ex- 
ecutive Board  of  the  Federation  and  members  of  the  Central  Au- 
thority of  the  Trade  Union  or  Trade  Unions  concerned. 

An  Employer  who  refuses  to  employ  Trade  Unionists  will 
not  be  eligible  to  sit  in  Conferences. 

The  following  Trade  Unions  are  parties  to  this  Agreement,  viz. : 
Steam  Engine  Makers'  Society, 
United  Machine  Workers'  Association, 
National  United  Society  op  Smiths  and  Hammermen, 
Society  of  Aaialgamated  Toolmakers,  Engineers  and 

Machinists. 
Scientific  Instrument  Makers'  Trade  Society, 
UmTED  Kingdom  Society  of  Amalgamated  Smiths  and 

Strikers. 
The  following  are  parties  to  the  aforementioned  "Provisions 
for  Avoiding  Disputes  " : 

Electrical  Trades  Union, 

National  Society  of  Amalgamated  Brassworkers  and 

Metal  Mechanics, 
United  Journeymen  Brassfounders,  Turners,  Fitters, 

Finishers  and  Coppeiwmiths'  Association  of  Great 

Britain  and  Ireland. 

PRO\TSIONS  FOR  AVOIDING  DISPUTES 

as  agreed  between 
The    Engineering    Employers'    Federation 

AND 

Amalgamated    Society    of    Engineers, 
Workers'   Union, 

National  Union  of  General  Workers, 
National  Amalga:mated  Union  of  Labour, 


COMMON  SENSE  AND  LABOUR      235 

Amalgamated  Society  of  Corem akebs. 

National  Amalgamated  Union  or  Enginembn,  Mi!chanic«, 

motormen,  and  electrical  workers, 
Associated   Blacksmiths'   and   Ironworkers'    Society   op 

Great  Britain  and  Irei^and 

When  a  question  arises,  an  endeavour  shall  be  made  by  the 
management  and  the  workmen  directly  concerned  to  settle  the 
same  in  the  works  or  at  the  place  where  the  question  has  arisen. 
Failing  settlement  deputations  of  workmen,  who  may  be  ac- 
companied by  their  Organizing  District  Delegate  (in  which  event 
a  representative  of  the  Employers'  Association  shall  also  be 
present),  shall  be  received  by  the  Employers*  Association  by 
appointment  without  unreasonable  delay  for  the  mutual  discus- 
sion of  any  question  in  the  settlement  of  which  both  parties  are 
directly  concerned.  In  the  event  of  no  settlement  being  arrived 
at,  it  shall  be  competent  for  either  party  to  bring  the  question 
before  a  Local  Conference  to  be  held  between  the  Local  Associa- 
tion and  the  Local  Representatives  of  the  Society. 

In  the  event  of  either  party  desiring  to  raise  any  question  a 
Tx)cal  Conference  for  this  purpose  may  be  arranged  by  applica- 
tion to  the  Secretary  of  the  Local  Association  or  to  the  Local 
Representative  of  the  Society. 

Local  Conferences  shall  be  held  within  seven  working  days, 
unless  otherwise  mutually  agreed  upon,  from  the  receipt  of  the 
application  by  the  Secretary  of  the  Local  Association  or  the  Local 
Representative  of  the  Society. 

Failing  settlement  at  a  Local  Conference  of  any  question 
brought  before  it,  it  shall  be  competent  for  either  party  to 
refer  the  matter  to  a  Central  Conference  which,  if  thought 
deairable,  may  make  a  joint  recommendation  to  the  constituent 
bodies. 

Central  Conferences  shall  be  held  on  the  Second  Friday  of 


2Se      COMMON  SENSE  AND  LABOUR 

each  month,  at  which  questions  referred  to  Central  Conference 
prior  to  fourteen  days  of  that  date  shall  be  taken. 

Until  the  procedure  provided  above  has  been  carried  through 
there  shall  be  no  stoppage  of  work  either  of  a  partial  or  a  gen- 
eral character. 


ii 


r 


Even  before  the  war  the  trades  union  organization 
ad  settled  down  on  Great  Britain  like  some  huge 
octopus  with  one  or  more  tentacles  reaching  into 
every  shop.  The  relation  of  master  and  man  dis- 
appeared and  in  its  place  came  a  hostile  relation  of 
employers'  association  vs,  employees'  association 
that  was  either  legal  or  extra-legal,  but  which  in  true 
English  fashion  resolved  itself  into  a  kind  of  constitu- 
tional arrangement  with  each  side  holding  on  to 
written  rights  as  firmly  as  their  forefathers  held 
on  to  the  provisions  of  Magna  Charta.  The  actions 
of  the  employers  and  the  employees  were  governed 
as  exactly  as  is  the  conduct  of  a  military  officer  and 
with  as  little  opportunity  for  initiative. 

Some  trades  were  further  advanced  than  others 
and  some  were  more  radical.  The  miners  have  al- 
ways been  very  radical  and  their  head  for  many 
years,  Robert  Smillie,  is  an  outspoken  advocate  of 
complete  control  by  the  workers.  The  advantages 
of  combination  having  been  seen,  three  of  the  largest 
and  most  powerful  unions  went  a  step  further  and 


( 


COMMON  SENSE  AND  LABOUR      237 

made  an  offensive  and  defensive  alliance.  This 
"Triple  Alliance"  is  a  combination  of  the  transport 
workers,  the  railway  employees,  and  the  coal  miners. 
Their  officers  hold  the  keys  of  industry;  should  they 
strike  in  unison  Great  Britain  could  not  function. 
They  have  each,  however,  struck  separately  and 
the  demands  of  the  coal  miners  will  give  an  indication 
of  the  present  trend  of  mind  of  the  British  worker. 
They  asked  for:  / 

1.  A  six-hour  day. 

2.  A  minimum  wage  of  a  pound  sterling  a  day. 

3.  The  nationalization  of  the  mines. 
The  strike  of  the  miners  was  not  left  to  the  people 

concerned;  the  public  intervened  through  a  commis- 
sion appointed  by  the  Government  and  that  com- 
mittee refused  nationalization  for  the  present  but 
granted  a  day  which  would  gradually  shorten  to 
six  hours  and  made  a  substantial  increase  in  wages. 
They  also  recommended  that  a  penny  be  taken  from 
each  ton  of  coal  mined  and  applied  to  the  bettering 
of  housing  conditions.  It  came  out  before  that  com- 
mission that  the  mine  owners  had  consistently  more 
than  doubled  the  price  of  coal  with  each  wage  in- 
crease previously  granted  and  this  has  directed  the 
attention  of  labour  generally  to  the  subject  of  the 


238       COMMON  SENSE  AND  LABOUR 

profits  of  proprietors.  Here  is  a  characteristic  ex- 
pression : 

"Let  it  never  so  plausibly  be  accepted  that  the 
capitalist  class  should  continue  to  exist;  let  it  be 
never  so  plausibly  argued  that  the  maintenance  of 
the  profiteering  system  is  necessary  or  advisable, 
the  resolute  affirmation  must  be  made  and  main- 
tained by  labour  that,  while  one  penny  of  profit  con- 
tinues to  be  earned  by  capital,  labour  cannot  enter 
into  a  final  agreement  with  it.  Compromises,  tem- 
porary agreements,  conditional  settlements,  these, 
it  is  true,  cannot  be  avoided.  What  can  be  avoided 
is  the  admission  that  except  by  their  force  capitalists 
as  such  have  a  right  to  exist .  The  principle  that  labour 
is  entitled  to  the  whole  of  its  product  is  just,  and  any 
dilution  of  the  principle  is  a  concession  to  injustice." 

At  the  opening  of  the  war  in  1914  the  labour 
condition  of  Great  Britain  was  very  critical.  The 
employers  and  employees  had  deadlocked  and  the 
provisions  of  the  existing  agreements  were  flagrantly 
disregarded  by  both  sides.  At  once  it  became  ap- 
parent that  the  proper  munitions  could  not  be  turned 
out  if  labour  did  not  do  its  part.  The  Government 
called  a  conference  of  labour  men  (Treasury  Con- 
ference of  March,   1915)   and  agreed  upon  certain 


COMMON  SENSE  AND  LABOUR       239 

principles  which  were  later  embodied  in  the  Muni- 
tions Act.  The  workers  agreed  that  there  should 
be  no  stoppage  of  work  upon  munitions  and  that 
all  regulations  restricting  output  should  be  put 
aside  and  to  arbitrate  differences.  The  Government 
agreed  to  supervise  all  factories,  to  limit  profits, 
to  set  up  certain  standards  of  pay,  and  that  all  the 
pre-war  powers  of  the  unions  be  restored  after  the 
war.  Later  the  men  agreed  to  the  dilution  of  labour 
and  the  entry  of  women  into  the  shops.  The  pre- 
vious regulations  had  prevented  the  use  of  unskilled 
laboiu"  even  for  machine  tasks  that  required  no  skill; 
the  policy  had  been  that  a  machine  should  never  be 
allowed  to  replace  a  man. 

As  the  war  went  on  and  labour  grew  more  and  more 
powerful — as  it  became  more  and  more  necessary 
for  the  conduct  of  the  war — the  necessity  forced  itself 
for  a  constructive  programme  to  replace  the  purely  de- 
structive programme  it  had  previously  followed.  It 
therefore  in  1917  adopted  a  kind  of  platform  of  con- 
siderable elaboration,  the  four  "pillars  "  of  which  were : 


(a)  The  Universal  Enforcement  of  the  National  Minimum. 

(b)  The  Democratic  Control  of  Industry. 

(c)  The  Revolution  in  National  Finance. 

(d)  The  Surplus  Wealth  for  the  Common  Good. 


/ 


240       COMMON  SENSE  AND  LABOUR 

The  democratic  control  of  industry  is  defined  as: 

It  demands  the  progressive  elimination  from  the  control  of 
industry  of  the  private  capitalist,  individual,  or  joint-stock;  and 
the  setting  free  of  all  who  work,  whether  by  hand  or  by  brain,  for 
the  service  of  the  community,  and  of  the  community  only.  And 
the  Labour  party  refuses  absolutely  to  believe  that  the  British 
people  will  permanently  tolerate  any  reconstruction  or  perpetua- 
tion of  the  disorganization,  waste,  and  inefficiency  involved  in 
the  abandonment  of  British  industry  to  a  jostling  crowd  of  sepa- 
rate private  employers,  with  their  minds  bent,  not  on  the  service 
of  the  community,  but — by  the  very  law  of  their  being — only  on 
the  utmost  possible  profiteering.  What  the  nation  needs  is 
imdoubtedly  a  great  bound  outward  and  onward  in  its  aggregate 
productivity.  But  this  cannot  be  secured  merely  by  pressing 
the  manual  workers  to  more  strenuous  toil,  or  even  by  encourag- 
ing the  Captains  of  Industry  to  a  less  wasteful  organization  of 
their  several  enterprises  on  a  profit-making  basis.  What  the 
Labour  party  looks  to  is  a  genuinely  scientific  reorganization  of 
the  nation's  industry,  no  longer  deflected  by  individual  profiteer- 
ing, on  the  basis  of  the  Common  Ownership  of  the  means  of  Pro- 
duction; the  equitable  sharing  of  the  proceeds  among  all  who 
participate  in  any  capacity  and  only  among  these,  and  the  adop- 
tion, in  particular  services  and  occupations,  of  those  systems  and 
methods  of  administration  and  control  that  may  be  found,  in 
practice,  best  to  promote,  not  profiteering,  but  the  public  interest. 

And  again  it  said: 

In  the  disposal  of  the  surplus  above  the  Standard  of  Life  society 
has  hitherto  gone  as  far  wrong  as  in  its  neglect  to  secure  the  neces- 
sary basis  of  any  genuine  industrial  efficiency  or  decent  social 
order.  We  have  allowed  the  riches  of  our  mines,  the  rental 
value  of  our  lands  superior  to  the  margin  of  cultivation,  the 


COMMON  SENSE  AND  LABOUR      241 

extra  profits  of  the  fortunate  capitalists,  even  the  material  out- 
come of  scientific  discoveries — which  ought  by  now  to  have  made 
this  Britain  of  ours  immune  from  class  poverty  or  from  any  wide- 
spread destitution — to  be  absorbed  by  individual  proprietors; 
and  then  devoted  very  largely  to  the  senseless  luxury  of  an  idle 
rich  class.  Against  this  misappropriation  of  the  wealth  of  the 
community,  the  Labour  party — speaking  in  the  interests  not  of 
the  wage-earners  alone,  but  of  every  grade  and  section  of  pro- 
ducers by  hand  or  by  brain,  not  to  mention  also  the  generations 
that  are  to  succeed  us,  and  of  the  permanent  welfare  of  the  com- 
munity— emphatically  protests.  One  main  Pillar  of  the  House 
that  the  Labour  party  intends  to  build  is  the  future  appropria- 
tion of  the  Surplus,  not  to  the  enlargement  of  any  individual  for- 
tune, but  to  the  Common  Good.  It  is  from  this  constantly  aris- 
ing Surplus  (to  be  secured,  on  the  one  hand,  by  Nationalization 
and  Municipalization  and,  on  the  other,  by  the  steeply  graduated 
Taxation  of  Private  Income  and  Riches)  that  will  have  to  be 
found  the  new  capital  which  the  community  day  by  day  needs 
for  the  perpetual  improvement  and  increase  of  its  various  enter- 
prises, for  which  we  shall  decline  to  be  dependent  on  the  usury- 
exacting  financiers.  It  is  from  the  same  source  that  has  to  be 
defrayed  the  public  provision  for  the  Sick  and  Infirm  of  all  kinds 
(including  that  for  Maternity  and  Infancy)  which  is  still  so 
scandalously  insufficient;  for  the  Aged  and  those  prematurely 
incapacitated  by  accident  or  disease,  now  in  many  ways  so  im- 
perfectly cared  for;  for  the  Education  alike  of  children,  of  adoles- 
cents and  of  adults,  in  which  the  Labour  party  demands  a 
genuine  equality  of  opportunity  overcoming  all  differences  of  ma- 
terial circumstances;  and  for  the  organization  of  public  improve- 
ments of  all  kinds,  including  the  brightening  of  the  lives  of  those 
now  condemned  to  almost  ceaseless  toil,  and  a  great  development 
of  the  means  of  recreation.  From  the  same  source  must  come 
the  greatly  increased  public  provision  that  the  Labour  party 


,f 


242      COIVEMON  SENSE  AND  LABOUR 

will  insist  on  being  made  for  scientific  investigation  and  original 
research,  in  every  branch  of  knowledge,  not  to  say  also  for  the 
promotion  of  music,  literature,  and  fine  art,  which  have  been 
under  Capitalism  so  greatly  neglected,  and  upon  which,  so  the 
Labour  party  holds,  any  real  development  of  civilization  funda- 
mentally depends.  Society,  like  the  individual,  does  not  live 
by  bread  alone — does  not  exist  only  for  perpetual  wealth  produc- 
tion. It  is  in  the  proposal  for  this  appropriation  of  every  surplus 
for  the  Common  Good — in  the  vision  of  its  resolute  use  for  the 
building  up  of  the  community  as  a  whole  instead  of  for  the  magni- 
fication of  individual  fortunes — that  the  Labour  party,  as  the 
Party  of  the  Producers  by  hand  or  by  brain,  most  distinctively 
marks  itself  off  from  the  older  political  parties,  standing,  as  these 
do  essentially  for  the  maintenance,  unimpaired,  of  the  perpetual 
private  mortgage  upon  the  annual  product  of  the  nation  that  is 
involved  in  the  individual  ownership  of  land  and  capital. 

These  quotations  suflSciently  show  that  labour  in 
England  on  its  constructive  side  is  entirely  socialistic 
and  has  gone  far  beyond  wages  and  hours  and  shop 
conditions;  its  programme  has  most  of  the  features 
of  what  is  known  as  the  "Social  Revolution"  except 
that  it  does  not  advocate  violence.  All  of  the  ends 
are  to  be  achieved  by  constitutional  methods. 

The  difficulty  with  the  whole  progi'amme  is  that 
an  apparently  democratic  scheme  is  to  be  put 
through,  just  how  is  not  stated,  by  autocratic 
bodies.  The  trades  imions  have  certain  regulations 
which  require  pre-requisites  of  skill   and   the   like 


COMMON  SENSE  AND  LABOUR      243 

for  membership  and  their  tendency  is  to  become 
autocratic  in  fact  while  democratic  in  word.  The 
ordinary  member  of  a  trades  imion  has  about  as 
much  to  say  in  its  decisions  as  has  an  independent 
voter  in  a  boss-ridden  ward.  Again,  the  trades  union 
organization  with  its  intricate  sub-division  of  trades 
is  most  unwieldy  within  a  shop — instead  of  the 
workers  being  able  to  protest  as  a  mass  they  are 
frequently  compelled  to  act  through  a  dozen  mediums 
with  no  certainty  as  to  what  or  when  those  mediums 
would  decide.  Finally  the  trades  unions  have  no 
place  for  the  new  elements  in  war  labour — the  un- 
skilled man  and  the  woman. 

Take  the  case  of  the  unskilled  man.  Up  to  the 
time  of  the  war  he  had  never  held  a  steady  job  or 
received  wages  that  did  more  than  permit  him  to  ex- 
ist. During  the  war  he  found  plenty  of  employ- 
ment at  high  wages  and  for  the  first  time  experienced 
something  of  economic  security.  Being  used  as  a 
"dilutee"  he  discovered  that  many  of  the  tasks  which 
were  supposed  to  require  extraordinary  skill  did 
not  really  require  so  much  skill  after  all  and  that  he 
could  easily  perform  them.  With  the  end  of  the 
war  he  saw  the  trades  unions  insisting  that  these 
tasks  again  be  restored  to  their  members  and  that 


244      COMMON  SENSE  AND  LABOUR 

he  be  thrown  out  on  casual  jobs.  The  interest  of 
the  unskilled  man  and  the  interest  of  the  trades 
unionist  became  opposed. 

Take  the  women.  The  trades  unions  set  their 
faces  absolutely  against  the  retention  of  women  in 
places  which  men  had  filled  before  the  war.  They 
insisted  that  they  be  discharged  forthwith.  A  con- 
siderable number  of  the  women  had  not  worked  be- 
fore the  war  but  more  of  them  had  worked — it  is 
fiction  that  women  war  workers  were  anywhere 
drawn  from  the  comfortably  living  classes — and  they 
did  not  care  to  return  to  the  ill-paid  drudgery  of 
domestic  or  similar  service.  Their  interests  were  op- 
posed to  the  trades  imions. 

Even  before  the  war  a  movement  in  opposition  to 
the  trades  unions  had  arisen,  knowTi  as  the  "Rank 
and  File  Movement."  It  asked  for  the  abolition 
of  craft  unions  and  the  substitution  of  one  great 
workers'  union  which  should  have  no  qualification 
for  membership  excepting  the  common  ability  to 
work.  The  leaders  were  all  disciples  of  Karl  Marx 
and  agreed  thoroughly  with  the  Russian  Bolshevists. 
They  were  for  the  instant  destruction  of  capital  and 
the  rule  of  the  proletariat.  They  found  their  strong- 
est hold  in  the  Clyde  shipyards  and  were  behind  the 


COMMON  SENSE  AND  LABOUR      245 

strikes  of  1915.  The  government  then  deported 
the  ringleaders  from  Glasgow,  but  permitted  them 
to  go  into  other  districts,  notably  Sheffield  and  Co- 
ventry, where,  setting  up  as  martyrs,  they  spread 
their  doctrine  of  the  class  war.  They  proposed 
that  the  control  of  industry  be  in  the  workshop  and 
not  in  any  trades  union  body.  Thus  they  were  as 
bitterly  against  the  trades  union  as  against  the  cap- 
italist, and  in  fact  classed  them  together  for,  whatever 
the  declarations  of  the  trades  unions,  their  leaders 
and  members  were  squarely  for  the  continuance  of 
the  system  of  collective  bargaining  between  capital 
and  labour  under  trades  union  supervision. 

The  new  body  was  open  to  both  sexes  and  it  found 
favour  with  all  who  desired  "direct  action."  It 
called  several  strikes  in  defiance  of  the  imion  execu- 
tives and  thereby  started  that  most  ominous  of 
British  movements — the  "unofficial  strike."  Since 
the  strikes  were  not  sanctioned  by  the  executives 
the  strikers  could  not  draw  strike  pay  and  the  new 
organization  then  developed  the  doctrine  of  the  short 
strike.  Instead  of  staying  out  for  long  they  advo- 
cated short  and  frequent  strikes.  They  announced 
that  they  would  pay  no  attention  at  all  to  any  agree- 
ments which  they  happened  to  make  at  the  moment 


246      COMMON  SENSE  AND  LABOUR 

with  capital  in  order  to  settle  a  strike.  It  was  wrong 
to  compromise  with  capital  and  they  would  regard 
their  compromises  only  as  a  means  by  which  to  put 
the  employer  off  his  guard. 

The  new  movement  could  not  gain  ground  in  the 
union  councils;  therefore  they  took  the  workshops  as 
their  field  and  started  an  auxiliary  movement  known 
as  the  "Shop  Stewards'  Movement." 

THE   SHOP   STEWARD 

The  shop  steward  is  very  old  in  British  industry. 
No  one  seems  to  know  when  he  first  appeared;  old 
factory  men  remember  having  stewards  twenty 
years  ago.  The  original  purpose  was  to  have  men 
in  each  department  elected  by  the  members  of  the 
department  so  that  the  management  might  have  a 
ready  means  of  communication  with  the  workers. 
A  small  department  would  have  a  single  steward 
but  a  large  department  would  have  several.  They 
were  elected  by  the  men  in  meetings  held  outside  the 
factory — British  workers  rarely  hold  any  kind  of  a 
meeting  at  the  works.  The  antipathy  to  the  em- 
ployers is  so  great  that  they  suspect  they  are  being 
spied  upon  in  a  meeting  at  the  works.  The  elected 
stewards  formed  a  kind  of  committee  and  nominated 


COMMON  SENSE  AND  LABOUR      247 

one  of  their  number  as  "convenor'*  or  chairman. 
The  convenor  attended  to  the  calling  of  meetings 
and  was  the  oflScial  spokesman  of  the  committee 
with  the  employers.  In  some  few  cases  the  stewards 
have  had  a  constructive  function,  but  more  com- 
monly they  have  existed  simply  to  pass  on  "kicks." 
They  rarely  decide  anything  for  themselves. 

In  unionized  shops  they  did  have  a  function  in 
representing  all  of  the  people  in  intra-shop  affairs 
which  did  not  concern  the  unions  as  such.  For  in- 
stance, sanitary  improvements,  complaints  against 
individuals,  and  the  like,  which  did  not  come  under 
union  rules,  would  pass  into  the  hands  of  the  stewards. 
In  other  cases  the  steward  was  a  minor  union  official 
and  did  not  represent  the  workers  as  a  whole.  When 
he  was  a  union  officer  he  looked  after  new  men,  saw 
that  dues  were  paid,  and  watched  for  infractions  of 
union  rules. 

But  the  steward's  job  was  not  a  very  pleasant  one 
and  carried  with  it  so  little  honour  that  in  many 
places  any  one  who  asked  to  be  a  steward  got  the 
place.  Frequently  the  employers  did  not  even  know 
who  the  stewards  were.  Of  late  years,  since  the  rise 
of  the  Rank  and  File  Movement,  the  shop  stewards 
have  quite  changed  their  functions. 


248      COMMON  SENSE  AND  LABOUR 

The  radical  leaders  working  from  the  shop  control 
side  saw  in  the  shop  stewards  a  better  chance  of  suc- 
cess than  with  the  union  officers,  who  were  too  well 
fixed  politically  easily  to  be  disturbed.  By  planting 
a  radical  shop  steward  in  the  midst  of  a  union  group 
they  hoped  to  spread  their  propaganda.  Therefore 
they  bent  all  energy  upon  these  representatives  and 
with  such  good  results  that  to-day  in  England  prob- 
ably two  thirds  of  the  stewards  are  radicals.  The 
old  function  of  the  steward  was  to  make  peace  easy 
or  at  least  to  give  a  chance  to  adjust  troubles;  the 
function  of  the  new  steward  is  to  cause  all  the  trouble 
that  he  can. 

During  the  war  the  functions  of  the  pre-war  shop 
stewards  grew  enormously,  but  side  by  side  with 
the  official  shop  stewards,  recognized  by  the  unions 
through  their  district  committees,  grew  up  a  class 
of  unofficial  shop  stewards  not  recognized  by  and 
often  not  attached  to  any  particular  union.  The 
line  between  official  and  unofficial  stewards  is,  how- 
ever, by  no  means  hard  and  fast,  and  often  it  is 
difficult  to  say  whether  a  particular  steward  is  recog- 
nized or  not.  The  unofficial  stewards  were  awaiting 
their  chance.  The  break  came  when  the  shop  stew- 
ards, first  on  the  Clyde  and  subsequently  in  most  of 


COMMON  SENSE  AND  LABOUR      249 

the  principal  centres,  joined  together  to  form  not 
only  works  committees  in  particular  works  but  also 
workers'  committees  covering  all  the  works  in  a 
district.  Committees  of  stewards  in  a  particular 
works  are  often  recognized  by  the  trades  unions,  but 
workers'  committees  are  always  purely  unofficial 
bodies. 

These  workers'  committees  have  usually  been 
dominated  by  men  of  "industrial  unionist"  views. 
These  men  have  continued  to  belong  to  their  various 
trades  unions  and,  as  a  rule,  to  work  for  amalgamation 
among  them  on  industrial  lines,  but  during  the  war 
they  have  repeatedly  taken  action  in  calling  strikes 
without  the  consent  of  the  union  executives — who 
have  been  unable  to  do  so  owing  to  the  operation 
of  the  Munitions  Acts.  In  the  minds  of  most  of  the 
advanced  elements  in  the  shop  stewards'  movement 
the  right  basis  for  industrial  action  is  the  work- 
shop, and  organization  in  the  labour  movement 
should,  in  their  view,  be  built  up  on  an  all-grades 
workshop  basis.  Many  hope  to  achieve  this  by  a 
transformation  of  the  existing  union  machinery,  and 
they  work  for  this  transformation  within  their  unions, 
both  as  a  lever  for  bringing  about  amalgamation  and 
as  a  means  of  securing  control  over  industry. 


y 


250      COMMON  SENSE  AND  LABOUR 

Late  in  1917  negotiations  were  entered  into  be- 
tween the  trades  union  executives  and  the  employers 
for  the  recognition  of  shop  stewards,  and  an  agree- 
ment providing  for  partial  recognition  was  accepted 
by  some  of  the  unions. 

The  unofficial  shop  stewards'  and  workers'  com- 
mittee movement  on  the  whole  repudiates  recogni- 
tion at  present,  holding  that  it  will  hamper  freedom 
of  action  and  will  mean  a  surrender  to  craft  unionism. 
Recognition,  these  elements  hold,  is  desirable  only 
in  an  industrial  union.  For  the  present  they  prefer 
to  remain  entirely  unofficial,  without  restrictions  and 
without  responsibility.  A  minority,  but  only  a  small 
minority,  has  the  idea  of  completely  overthrowing  the 
existing  unions  and  substituting  for  them  a  new  shop 
movement,  but  the  vast  majority  works  for  the 
transformation  of  the  existing  unions  and  expects  to 
find  in  them,  when  they  have  been  transformed  by 
amalgamation  and  include  all  grades,  skilled  and 
unskilled  alike,  a  full  form  of  recognition  which  will 
make  workshop  organization  the  basis  of  the  whole 
industrial  structure. 

The  unofficial  shop  stewards'  movement,  as  a 
whole,  seeks  the  overthrow  of  capitalism  and  the 
realization  of  the  workers'  control  over  industry. 


COMMON  SENSE  AND  LABOUR      ^51 

The  most  active  section  are  the  industrial  unionists 
of  the  Socialist  Labour  party,  but  they  are  only  a 
small  minority  of  the  whole,  and  there  are  many 
different  theoretical  points  of  view  represented  in  the 
movement.  The  bulk  of  the  adherents  have  hardly 
a  definite  theoretical  point  of  view. 

Being  a  shop  steward  does  not  appeal  to  the 
workers  of  higher  skill  and  pay.  The  stewards  are 
often  drawn  from  the  very  lowest  grades  who  are\ 
always  most  susceptible  to  radical  propaganda.         ' 

Sometimes  it  has  happened,  for  example,  that  the 
shop  steward  in  a  shop  employing,  say,  highly 
skilled  electricians,  has  been  an  unskilled  labourer, 
and  employers  have  declined  to  discuss  highly  skilled 
work  with  him.  But  the  shop-steward  movement  has 
grown,  and  the  advocates  of  industrial  unionism,  as 
against  craft  unionism,  have  seen  in  it  the  possibility 
of  breaking  up  the  craft  unions.  The  shop  stewards 
organized,  and  then  took  unto  themselves  the  right 
to  bring  out  a  whole  shop  on  strike,  irrespective  of 
what  the  executives  of  the  trades  unions  concerned 
might  say. 

The  shop  stewards  are  less  versed  in  affairs  than 
the  experienced  officials  of  the  trades  unions,  and  they 
have  no  funds.     An  unauthorized  strike  is  one  not 


252      COMMON  SENSE  AND  LABOUR 

authorized  by  the  executive,  and  in  which  no  union 
funds  are  available  for  strike  pay.  Having  no  funds 
to  draw  upon,  it  cannot  settle  down,  like  the  old 
trades  unions,  to  a  long  struggle  of  endurance  be- 
tween employers  and  employed.  It  has  therefore 
adopted  the  lightning  strike,  intended  to  last  a  few 
days,  followed  by  another  lightning  strike,  and  so  on. 
<  The  manager  of  a  shop  now  rather  expects  a  shop 
steward  to  be  a  radical.  If  an  extreme  socialist  is 
taken  on  to-day,  to-morrow  he  will  undoubtedly  be, 
by  some  mysterious  process,  a  shop  steward.  They 
are  always  ready  to  strike  or  to  promote  a  strike 
and  they  are  behind  the  great  unauthorized  strike 
movement  in  England.  In  the  Clyde  strikes  of 
February,  1919,  the  shop  stewards  were  the  first  to 
go  out  and  they  organized  themselves  into  district 
Workers'  and  Soldiers'  Committees  on  approved 
Russian  lines. 

The  shop  stewards  are  not,  however,  to  be  judged 
wholly  by  the  revolutionary  twist  which  has  turned 
the  majority.  In  a  considerable  number  of  cases 
they  have  been  of  actual  service.  Look  at  these 
experiences. 

The  first  is  a  firm  employing  6,000  people  and 
it  has  had  shop   stewards   for   some    years.    The 


COMMON  SENSE  AND  LABOUR      253 

system  sprung  up  in  this  fashion.  Originally  in- 
dividual workmen  laid  their  grievances  before  the 
management,  bringing,  according  to  the  general 
habit,  a  companion  to  help  to  state  the  case.  As 
time  went  on,  men  who  were  recognized  as  good 
advocates  were  sorted  out  and  they  became  semi- 
official advocates.  About  1912  or  1913  this  in- 
formal system  developed  into  a  recognized  com- 
mittee of  shop  stewards.  Each  department  elects 
its  own  shop  steward,  the  total  number  of  whom  is 
nearly  forty.  They  form  a  committee.  On  questions 
affecting  a  particular  department  or  departments,  the 
convenor  interviews  the  management  along  with  the 
shop  steward  or  shop  stewards  concerned,  while  on 
questions  affecting  all  the  works  he  interviews  the 
management,  in  company  with  all  the  shop  stew- 
ards. Among  specific  matters  handled  may  be  men- 
tioned the  following:  (a)  The  base  times  for 
premium  work.  This  system  prevails  throughout 
the  works,  and  if  the  base  time  cannot  be  settled 
between  the  foreman  of  the  department  and  the  work- 
men, then  the  matter  is  brought  by  the  convenor  and 
the  shop  steward  of  the  department  to  the  manage- 
ment, (b)  Dilution — the  shop  stewards  have  pro- 
tested against  the  principle  but  they  have  made  an 


254       COMMON  SENSE  AND  LABOUR 

amicable  arrangement  with  the  management  in 
every  case.  The  wages  of  dilutees  have  also  been 
discussed  in  conferences  by  the  management  and 
committee. 

Another  firm,  a  Glasgow  firm  employing  2,350 
people,  has  at  the  present  time  two  Workers' 
Committees  in  the  establishment.  The  first,  which 
is  called  the  Shop  Committee,  must  also  be  desig- 
nated a  Welfare  Committee,  and  has  been  in  existence 
since  1900.  In  1916  they  enlarged  this  committee, 
or  rather,  they  formed  a  separate  committee,  which  is 
called  the  Industrial  Committee,  and  is  based  essen- 
tially on  trade  unionism  and  the  shop-steward  system. 
The  twelve  representatives  of  the  men  are  elected 
entirely  by  the  shop  stewards  of  the  different  unions. 
There  is  thus  no  system  of  election  by  all  the 
workers  and  the  committee  is  not  representative 
of  all  the  workers,  but,  on  the  other  hand,  there  is  a 
definite  nexus  established  with  trades  union  sentiment 
and  organization.  Two  directors  of  the  firm  and  the 
head  foreman  sit  with  the  twelve  representatives  of 
the  men.  When  there  is  business  to  transact,  the 
men's  representatives  are  paid  as  usual  during  the 
time  occupied  at  the  meetings.  The  members  of  the 
committee  hold  oflBce  for  one  year.     There  are  two 


COMMON  SENSE  AND  LABOUR      2o5 

chairmen,  one  from  the  men's  representatives  and  one 
from  the  firm's  and  they  preside  at  alternate  meet- 
ings. The  only  other  oflBcer  is  a  secretary  elected 
by  the  committee.  The  following  are  some  of 
the  questions  treated  by  the  Industrial  Committee 
during  eighteen  months:  (1)  The  question  of 
the  convenor  of  shop  stewards  going  into  other 
departments  for  the  discussion  of  grievances.  This 
was  discussed  and  the  result  was  the  formulation  of 
regulations.  (2)  Wages  of  women  and  girl  em- 
ployees. (3)  The  record  of  changes  in  practice. 
(4)  Questions  arising  from  the  premium  bonus 
system.  (5)  Appeals  against  dismissal.  (6)  The 
question  of  men  forgetting  to  clock  on,  and  of  whether 
they  should  receive  wages  for  the  period  for  which 
they  had  forgotten  to  clock  on.  (7)  The  question  of 
working  overtime  on  Saturdays  (the  committee 
agreed  to  refer  this  to  a  general  plebiscite).  (8) 
The  question  of  wages  of  apprentices.  (9)  The 
question  of  rules  for  night  shift  work. 

Another  firm  employing  a  very  large  number  of 
people  and  working  various  engineering  specialties 
has  a  committee  which  dates  back  to  1908.  The 
committee  consists  of  twenty-two  members,  one 
from  each  department.    Each  member  must  be  a 


256      COMMON  SENSE  AND  LABOUR 

trades  unionist,  but  voting  is  open  to  all  men,  whether 
or  not  trades  unionists.  The  women  do  not  have 
votes.  There  are  members  of  twenty-six  trades 
unions  in  the  works.  The  members  are  elected 
annually,  each  department  electing  its  represent- 
atives. The  procedure  with  regard  to  com- 
plaints consists  of  three  Courts  of  Appeal — the 
Works  Manager,  the  Managing  Director,  and  the 
Board  of  Directors.  Thus,  a  man  not  satisfied  with 
the  response  of  a  foreman  goes  to  his  departmental 
representative  on  the  committee  (or  directly  to  the 
secretary  or  chairman,  who  have  freedom  of  move- 
ment from  department  to  department).  The  chair- 
man or  secretary  of  the  committee  and  the  repre- 
sentative of  the  complainant's  department  then 
approach  the  Works  Manager,  and  thereafter,  if 
necessary,  the  Managing  Directors  and  finally  the 
Board  of  Directors.  The  committee  acts  for  al- 
most all  purposes  by  the  methods  just  mentioned. 
The  committee  has  been  largely  responsible  for  mak- 
ing the  appeal  for  better  timekeeping  effective,  and 
this  is  the  more  remarkable,  because  even  before  the 
appeal  was  made  the  timekeeping  record  was  con- 
sidered very  good.  The  other  questions  discussed 
with  the  officials  of  the  committee  and  the  repre- 


COMMON  SENSE  AND  LABOUR      257 

sentatives  on  it  of  particular  departments  have  in- 
cluded dilution,  which  was  carried  through  without 
trouble,  and  grievances  in  regard  to  premium  bonus 
times,  including  the  fixing  of  new  times  when  methods 
of  production  are  altered. 

A  small  engineering  establishment  in  the  west 
of  England  employs  men,  apprentices,  and  women. 
The  men  are  all  skilled  mechanics.  There  are  sixteen 
apprentices.  The  Works  Committee  was  formed 
in  the  autumn  of  1916.  It  was  set  up  by  the  man- 
agement in  order  to  administer  a  bonus  scheme 
proposed  by  the  management  in  response  to  a  de- 
mand by  the  employees  for  a  10  per  cent,  ad- 
vance in  wages.  The  committee  meets  regularly 
each  month.  (1)  To  settle  the  amount  to  be 
set  aside  for  the  payment  of  bonus.  For  this 
purpose,  the  books  of  the  company  are  opened 
to  the  committee.  (2)  To  assess  the  value  of 
the  profit-sharing  amount.  (3)  To  assess  the  fines 
incurred  by  employees  under  the  scheme.  (4) 
To  determine  the  amount  of  bonus  to  which  each 
employee  is  entitled. 

The  committee  represents  both  the  manage- 
ment and  the  employees.  The  two  Works  Mana- 
gers are  also  ex-officio  members.     The  rest  of  the 


258      COMMON  SENSE  AND  LABOUR 

committee  consists  of  six  representatives  elected 
by  ballot  by  all  the  employees.  These  members 
represent  the  works  as  a  whole.  The  commit- 
tee is  charged,  in  addition  to  its  special  duties, 
with  the  consideration  generally  of  any  grievances 
arising  in  the  shop.  Its  functions  in  this  re- 
spect are  not  specified  or  limited.  The  committee 
has  dealt  with  shop  conditions,  wages,  holidays,  and 
bad  timekeeping.  The  value  of  the  output  has 
already  advanced  some  30  per  cent,  and  is  expected 
to  rise  rapidly  in  the  near  future  owing  to  improved 
methods  and  efficiency.  The  committee  is  regarded 
as  a  great  success  and  has  acted  as  an  incentive  to 
efficiency  in  the  works  and  in  furthering  increased 
production. 

Another  small  engineering  works  employs  about  one 
hundred  and  twenty  men,  women,  and  boys  in  engi- 
neering work.  For  several  years  prior  to  the  latter  part 
of  1917  the  company  adopted  the  practice  of  meeting 
the  whole  of  the  men  employed  in  the  works  once  a 
month,  to  discuss  any  matters  connected  with  the  es- 
tablishment that  seemed  to  require  examination.  At 
the  end  of  1915  this  practice  was  abandoned  because 
it  was  felt  by  the  management  (1)  That  much  time 
was  wasted  discussing  irrelevant  and  unimportant 


COMMON  SENSE  AND  LABOUR      259 

matters;  (2)  That  real  grievances  did  not  freely  come 
out  in  the  presence  of  the  whole  body  of  the  employ- 
ees. The  employees  at  the  suggestion  of  the  man- 
aging director  elected  seven  representatives  to  form 
an  employees'  committee,  which  would  meet  as  a 
joint  works  committee  with  the  management.  The 
committee  is  composed  of  three  representatives  of 
the  management  nominated  by  the  managing  dkec- 
tor  and  seven  representatives  of  the  employees. 
The  functions  of  this  committee  are  very  similar  to 
those  already  mentioned.  The  committee  has 
proved  specially  useful  as  a  means  of  arriving  at  a 
proper  interpretation  of  official  orders  and  circulars. 
The  management  has  found  the  committee  of  the 
greatest  service  in  conducting  the  business  of  the 
works. 

A  firm  employing  700  men,  women,  and  boys  has  a 
committee  of  five  men.  The  women  and  boys  are 
not  represented.  The  five  members  represent  the 
shop  as  a  whole  and  do  not  represent  separate 
departments  or  grades.  The  principal  business  of 
the  committee  is  to  assist  in  fixing  and  adjusting 
piecework  prices.  The  management,  in  the  first 
instance,  settle  what  they  consider  fair  prices,  and 
submit  them  to  the  committee  with  the  data  on 


260      COMMON  SENSE  AND  LABOUR 

which  they  have  been  fixed.  The  men's  committee 
then  meets  separately  to  consider  the  suggested 
prices.  Ample  time  is  allowed  them  for  considera- 
tion and  discussion,  both  among  themselves  and 
with  the  workers  affected.  A  joint  meeting  is  then 
held  between  the  committee  and  the  management, 
at  which  the  several  prices  under  consideration  are 
reviewed  and  any  suggestions  as  to  amendment  are 
considered.  If  a  good  case  is  made  out  to  the  satis- 
faction of  the  management,  the  price  is  raised  or 
reduced.  If  it  becomes  necessary  to  reconsider  the 
price  already  fixed,  any  suggestions  on  this  score  are 
brought  by  the  committee  to  the  attention  of  the 
management  and  are  jointly  considered.  No  friction 
of  any  sort  has  so  far  arisen.  Prices  have  been  fre- 
quently reduced  or  increased  by  mutual  agreement. 

WORKSHOP  COMMITTEES 

The  fine  of  demarcation  between  the  committees  of 
shop  stewards  and  the  Works  Committee  is  indefinite. 
If  the  shop  stewards  happen  all  to  be  radicals  and 
meet  only  to  cause  trouble,  they  are  usually  called 
stewards,  but  if  they  are  a  reasonable  body  and 
organize  to  act  with  the  management  they  are  works 
committees. 


COMMON  SENSE  AND  LABOUR      261 

Here  are  some  opinions  expressed  by  employers 
who  have  had  experience  with  committees: 

(1)  ''Useful  work  is  the  outcome."  (2)  "Com- 
mittees should  be  encouraged;  much  depends  on 
class  of  men  chosen  from  both  sides."  (3)  "Applied 
to  large  establishments,  very  commendable."  (4) 
"If  established  generally,  would  do  an  infinite 
amount  of  good."  (5)  "Nothing  but  good  would 
accrue  if  such  committees  were  general."  (6)  "In 
entire  sympathy."  (7)  "Experience  is  a  very  happy 
one  and  not  by  any  means  one-sided,  as  the  members 
of  the  committee  do  everything  possible  to  render 
assistance  to  the  firm."  (8)  "Very  harmonious 
relations  although  .  .  .  grievances  much  too 
one-sided."  (9)  "Perfectly  satisfied."  (10)  "En- 
courages men  to  leave  work  to  engage  in  business 
which  management  should  attend  to."  (11)  "Power 
is  taken  from  management  and  exercised  by  the 
men."  (12)  "Simply  looking  for  trouble."  (13) 
"Advantage  would  be  taken  to  look  for  trouble." 
(14)  "Any  amount  of  friction  would  ensue."  (15) 
"  Afraid  grievances  would  come  from  only  one  side,  and 
little  endeavour  would  be  made  to  assist  the  manage- 
ment in  conduct  of  works."  (16)  "Dealing  with 
accredited  shop  stewards  entirely  satisfactory." 


262      COMMON  SENSE  AND  LABOUR 

The  Rt.  Hon.  G.  H.  Roberts,  formerly  Minister 
of  Labour,  advocates  the  workshop  committees. 
He  says  (and  he  was  once  a  worker  himself) : 

"It  is  essential  that  the  owners  should  sit  on  the 
committees,  for  after  all  the  primary  purpose  is  to 
promote  a  better  understanding.  I  realize  that  there 
may  be  difficulties  at  first,  and  that  workpeople  may 
be  unwilling  to  speak  frankly  in  the  presence  of 
their  employers.  There  is  no  reason  why  they 
should  not  first  meet  separately.  Much  of  the 
industrial  imrest  which  prevailed  before  the  war 
and  during  the  war  had  its  origin  in  what,  viewed 
dispassionately,  were  trivial  things,  which  could 
easily  be  remedied  if  there  were  a  tribunal  ready  at 
hand  to  deal  with  them.  The  immunity  of  strikes 
in  the  printing  trade  may  be  attributed  to  the  fact 
that  by  the  existence  of  the  "chapel,"  as  it  was 
termed,  close  personal  contact  was  maintained  with 
the  workers  and  those  in  authority.  We  must  recog- 
nize that  workmen  claim,  and  have  a  right  to  claim, 
a  fair  share  of  the  prosperity  they  help  to  create,  and 
a  voice  in  the  conditions  under  which  they  labour. 
I  want  workmen  to  take  an  active  interest  in  the 
welfare  of  their  firm,  to  make  suggestions  how  the 
quality  of  the  product  on  which  they  are  engaged 


COMMON  SENSE  AND  LABOUR      263 

can  be  improved,  how  the  quantity  can  be  increased, 
and  the  organization  bettered.** 

The  modern  best  thought  behind  the  Works 
Committee  is  that  it  shall  have  powers  of  construc- 
tion, and  it  has  been  generally  perceived  by  fore- 
handed employers  that  if  the  demand  for  workers' 
representation  is  not  to  destroy  the  wage  system, 
then  the  workers  must  be  taken  into  a  share  in  the 
management  through  committees.  Hence  we  find 
that  employers  think  more  of  the  committee  system 
than  do  the  employees;  the  employees  of  radical 
tendency  oppose  all  committees  which  do  other  than 
formulate  demands.  They  oppose  the  idea  of  con- 
ferences or  any  action  which  might  connote  mutuality. 
And  many  socialistic  writers  take  the  view  that 
the  workers'  committee  is  not  at  all  a  step  in  the 
right  direction  because  the  superior  intelligence  of 
the  employers  will  always  overcome  that  of  the 
employee  members;  they  see  it  as  a  wedge  driven 
into  the  solidarity  of  the  workers. 

At  first  the  unions  took  the  same  view;  they  thought 
that  the  committee  system  would  tend  toward 
shop  instead  of  union  control  and  permit  direct  ad- 
justment instead  of  adjustment  through  the  unions. 
Not  a  few  of  the  unions  had  even  gone  so  far  as  to 


264      COMMON  SENSE  AND  LABOUR 

declare  that  all  wages  over  the  minimum  should  not 
be  paid  directly  to  the  workers  but  to  the  union,  and 
by  it  distributed  in  accordance  with  needs.  Often 
in  the  action  of  the  British  unions  may  be  seen  a 
greater  desire  to  perpetuate  and  strengthen  the  union 
than  to  benefit  the  worker — which  is  one  of  the  rea- 
sons that  the  contra-union  movement  has  gained  so 
much. 

But  the  unions  stand  for  the  wage  system;  without 
wages  the  unions  could  not  exist.  There  is  really  no 
place  for  the  union  or  the  union  leader  in  syndicalism. 
And  hence  the  unions  found  that  their  interests  were 
not  on  the  side  of  the  control  by  workers,  but  on  the 
side  of  control  by  employers.  At  the  close  of  the  war 
it  became  apparent  that  the  pre-war  union  practices 
which  had  been  suspended  by  agreement  with  the 
Government  could  not  be  restored — that  the  clock 
could  not  be  turned  back. 

The  idea  had  been  that  the  soldiers  as  they  were 
demobilized  should  go  right  back  into  their  former 
jobs  and  the  country  would  start  on  its  ways  of  peace. 
But  the  soldiers  who  did  go  back  found  in  most  cases 
that  no  jobs  existed;  the  control  of  raw  materials  and 
the  various  other  governmental  controls  made  busi- 
ness too  nervous  at  once  to  engage  in  the  vicissitudes 


COMMON  SENSE  AND  LABOUR      265 

of  peace  work.  The  Government  granted  unemploy- 
ment allowances  to  all  who  had  not  jobs  and  they  paid 
these  allowances  directly  and  not  through  the  unions, 
thereby  giving  strength  to  the  communists*  propa- 
ganda that  the  Government  really  could  support 
the  population  if  only  it  so  chose. 

The  shortage  of  work  with  only  a  portion  of  the 
army  demobilized  gave  further  aid  to  those  who 
desired  to  resume  the  practice  of  having  a  man  do  as 
little  as  possible  in  order  that  more  men  might  be 
employed.  Up  on  the  Clyde  the  shipyard  people  and 
the  engineers  went  on  an  "unofficial"  strike  for  a 
forty-hour  week  on  the  plea  that  only  by  short  hours 
could  places  be  found  for  the  unemployed.  The 
miners  joined  in  a  strike  of  their  own  (which,  however, 
was  official)  and  the  London  tube  workers  went  out 
"unofficially"  for  some  days.  The  trainmen  threat- 
ened to  strike.  These  strikes  not  only  menaced  in- 
dustry, but,  with  industry,  the  unions.  The  unions 
had  to  take  the  side  of  the  employers  or  prepare  to  go 
out  of  business. 

In  the  meantime  a  Parliamentary  Committee 
headed  by  the  Rt.  Hon.  J.  H.  Whitley  and  composed 
of  union  men,  employers,  and  representatives  of  the 
general  public  had  been  appointed  to  devise  some 


^66      COjNIMON  sense  AND  LABOUR 

industrial  scheme  which  might  make  for  a  better  rt- 
lation  between  employer  and  employee.  They  took 
the  workshop  committee  idea  and  the  chief  features 
of  the  organization  of  the  engineering  trades,  which 
had  already  a  national  association  of  employers 
and  district  councils  erected  for  the  purpose  of 
dealing  with  the  unions  on  industrial  disputes  and 
changes. 

JOINT   INDUSTRIAL   COUNCILS 

The  Whitley  Committee  proposed  that  each  trade 
in  the  empire  organize  itself  by  constituting  first  a 
National  Joint  Industrial  Council  made  up  of  repre- 
sentatives of  the  employers'  association  and  of  the 
unions  with  district  councils  similarly  constituted 
from  the  district  associations  and  unions,  with  finally 
a  workshop  committee  of  employers '  and  employees ' 
representatives.  Being  on  the  supervisory  bodies, 
the  unions  gained  a  control  over  the  workshop  com- 
mittees, and  this  put  nearly  all  the  union  leaders  in 
consonance  with  the  plan. 

The  report  has  been  welcomed  as  the  greatest  step 
ever  taken  in  the  way  of  founding  an  enduring  rela- 
tion between  capital  and  labour.  Here  it  is  in 
full: 


COMMON  SENSE  AND  LABOUR      267 

To  THE  Right  Honourable  D.  Lloyd  George.  M.  P. 
Prime  Minister. 


Sir: 

We  have  the  honour  to  submit  the  following  Interim  Report 
on  Joint  Standing  Industrial  Councils. 

2.  The  terms  of  reference  to  the  Sub-Committee  are: — 

"(1)  To  make  and  consider  suggestions  for  securing  a 
permanent  improvement  in  the  relations  between  employ- 
ers and  workmen. 

"(2)  To  recommend  means  for  securing  that  industrial 
conditions  affecting  the  relations  between  employers  and 
workmen  shall  be  systematically  reviewed  by  those  con- 
cerned, with  a  view  to  improving  conditions  in  the 
future." 

3.  After  a  general  consideration  of  our  duties  in  relation  to 
the  matters  referred  to  us,  we  decided  first  to  address  ourselves 
to  the  problem  of  establishing  permanently  improved  relations 
between  employers  and  employed  in  the  main  industries  of  the 
country,  in  which  there  exist  representative  organizations  on 
both  sides.  The  present  report  accordingly  deals  more  espe- 
cially with  these  trades.  We  are  proceeding  with  the  considera- 
tion of  the  problems  connected  with  the  industries  which  are  less 
well  organized. 

4.  We  appreciate  that  under  the  pressure  of  the  war  both  em- 
ployers and  workpeople  and  their  organizations  are  very  much 
pre-occupied,  but,  notwithstanding,  we  believe  it  to  be  of  the 
highest  importance  that  our  proposals  should  be  put  before  those 
concerned  without  delaj%  so  that  employers  and  employed  may 
meet  in  the  near  future  and  discuss  the  problems  before  them. 

5.  The  circumstances  of  the  present  time  are  admitted  on  all 
sides  to  offer  a  great  opportunity  for  securing  a  permanent 
improvement  in  the  relations  between  employers  and  employed. 


268       COMMON  SENSE  AND  LABOUR 

while  failure  to  utilize  the  opportunity  may  involve  the  nation 
in  grave  industrial  difficulties  at  the  end  of  the  war. 

It  is  generally  allowed  that  the  war  almost  enforced  some 
reconstruction  of  industry,  and  in  considering  the  subjects  re- 
ferred to  us  we  have  kept  in  view  the  need  for  securing  in  the 
development  of  reconstruction  the  largest  possible  measure  of 
cooperation  between  employers  and  employed. 

In  the  interests  of  the  community  it  is  vital  that  after  the  war 
the  cooperation  of  all  classes,  established  during  the  war,  should 
continue,  and  more  especially  with  regard  to  the  relations  be- 
tween employers  and  employed.  For  securing  improvement 
in  the  latter  it  is  essential  that  any  proposals  put  forward  should 
offer  to  workpeople  the  means  of  attaining  improved  conditions 
of  employment  and  a  higher  standard  of  comfort  generally,  and 
involve  the  enlistment  of  their  active  and  continuous  coopera- 
tion in  the  promotion  of  industry. 

To  this  end,  the  establishment  for  each  industry  of  an  organ- 
ization, representative  of  employers  and  workp>eople,  to  have 
as  its  object  the  regular  consideration  of  matters  affecting  the 
progress  and  well-being  of  the  trade  from  the  point  of  view  of  all 
those  engaged  in  it,  so  far  as  this  is  consistent  with  the  general 
interest  of  the  community,  appears  to  us  necessary. 

6.  Many  complicated  problems  have  arisen  during  the  war 
which  have  a  bearing  both  on  employers  and  workpeople,  and 
may  affect  the  relations  between  them.  It  is  clear  that  industrial 
conditions  will  need  careful  handling  if  grave  difficulties  and 
strained  relations  are  to  be  avoided  after  the  war  has  ended. 
The  precise  nature  of  the  problems  to  be  faced  naturally  varies 
from  industry'  to  industry,  and  even  from  branch  to  branch 
within  the  same  industry.  Their  treatment  consequently  will 
need  an  intimate  knowledge  of  the  facts  and  circumstances  of 
each  trade,  and  such  knowledge  is  to  be  found  only  among  those 
directly  connected  with  the  trade. 


COMMON  SENSE  AND  LABOUR      269 

7.  With  a  view  to  providing  means  for  carrying  out  the  policy 
outlined  above,  we  recommend  that  His  Majesty's  Government 
should  propose  without  delay  to  the  various  associations  of 
employers  and  employed  the  formation  of  Joint  Standing  In- 
dustrial Councils  in  the  several  industries,  where  they  do  not 
aheady  exist,  composed  of  representatives  of  employers  and 
employed,  regard  being  paid  to  the  various  sections  of  the  indus- 
try and  the  various  classes  of  labour  engaged. 

8.  The  appointment  of  a  Chairman  or  Chairmen  should,  we 
think,  be  left  to  the  Council  who  may  decide  that  these  should 
be— 

(1)  A  Chairman  for  each  side  of  the  Council; 

(2)  A  Chairman  and  Vice-Chairman  selected  from  the 
members  of  the  Council  (one  from  each  side  of  the 
Council) ; 

(S)  A  Chairman  chosen  by  the  Council  from  independent 
persons  outside  the  industry;  or 

(4)  A  Chairman  nominated  by  such  person  or  authority 
as  the  Council  may  determine  or,  failing  agreement, 
by  the  Government. 

9.  The  Council  should  meet  at  regular  and  frequent  intervals. 

10.  The  objects  to  which  the  consideration  of  the  Councils 
should  be  directed  should  be  appropriate  matters  affecting  the 
several  industries  and  particularly  the  establishment  of  a  closer 
cooperation  between  employers  and  employed.  Questions  con- 
nected with  demobilization  will  call  for  early  attention. 

11.  One  of  the  chief  factors  in  the  problem,  as  it  at  first  pre- 
sents itself,  consists  of  the  guarantees  given  by  the  Government, 
with  Parliamentary  sanction,  and  the  various  undertakings  en- 
tered into  by  employers,  to  restore  the  Trade  Union  rules  and 
customs  suspended  during  the  war.  While  this  does  not  mean 
that  all  the  lessons  learnt  during  the  war  should  be  ignored,  it 
does  mean  that  the  definite  cooperation  and  acquiescence  by 


270      COMMON  SENSE  AND  LABOUR 

both  employers  and  employed  must  be  a  condition  of  any  setting 
aside  of  these  guarantees  or  undertakings,  and  that,  if  new  ar- 
rangements are  to  be  reached,  in  themselves  more  satisfactory 
to  all  parties  but  not  in  strict  accordance  with  the  guarantees, 
they  must  be  the  joint  work  of  employers  and  employed. 

12.  The  matters  to  be  considered  by  the  Councils  must  in- 
evitably differ  widely  from  industry  to  industry,  as  different 
circumstances  and  conditions  call  for  different  treatment,  but 
we  are  of  opinion  that  the  suggestions  set  forth  below  ought  to 
be  taken  mto  account,  subject  to  such  modification  in  each  case 
as  may  serve  to  adapt  them  to  the  needs  of  the  various  industries. 

13.  In  the  well-organized  industries  one  of  the  first  questions 
to  be  considered  should  be  the  establishment  of  local  and  works 
organizations  to  supplement  and  make  more  effective  the  work 
of  the  central  bodies.  It  is  not  enough  to  secure  cooperation  at 
the  centre  between  the  national  organizations;  it  is  equally 
necessary  to  enlist  the  activity  and  support  of  employers  and 
employed  in  the  districts  and  in  individual  establishments.  The 
National  Industrial  Council  should  not  be  regarded  as  complete 
in  itself;  what  is  needed  is  a  triple  organization — in  the  work- 
shops, the  districts,  and  nationally.  Moreover,  it  is  essential 
that  the  organization  at  each  of  these  three  stages  should  proceed 
on  a  common  principle,  and  that  the  greatest  measure  of  common 
action  between  them  should  be  secured. 

14.  With  this  end  in  view,  we  are  of  opinion  that  the  following 
proposals  should  be  laid  before  the  National  Industrial  Councils: — ■ 

(a)  That  District  Councils,  representative  of  the  Trade 
Unions  and  of  the  Employers'  Association  in  the  industry 
should  be  created,  or  developed  out  of  the  existing  ma- 
chinery for  negotiation  in  the  various  trades. 

(b)  That  Works  Committees,  representative  of  the 
management  and  of  the  workers  employed,  should  be 
instituted  in  particular  works  to  act  in  close  cooperation 
with  the  district  and  national  machinery. 


COMMON  SENSE  AND  LABOUR      271 

As  it  is  of  the  highest  importance  that  the  scheme  making 
provision  for  these  Committees  should  be  such  as  to  secure  the 
support  of  the  Trade  Unions  and  Employers'  Associations  con- 
cerned, its  design  should  be  a  matter  for  agreement  between 
these  organizations. 

Just  as  regular  meetings  and  continuity  of  cooperation  are 
essential  in  the  case  of  the  National  Industrial  Councils,  so  they 
seem  to  be  necessary  in  the  case  of  the  district  and  works  organ- 
izations. The  object  is  to  secure  cooperation  by  granting  to 
workpeople  a  greater  share  in  the»consideration  of  matters  affect- 
ing their  industry,  and  this  can  only  be  achieved  by  keeping 
employers  and  workpeople  in  constant  touch. 

15.  The  respective  functions  of  Works  Committees,  District 
Councils,  and  National  Councils  will  no  doubt  require  to  be 
determined  separately  in  accordance  with  the  varying  conditions 
of  different  industries.  Care  will  need  to  be  taken  in  each 
case  to  delimit  accurately  their  respective  functions,  in  order  to 
avoid  overlapping  and  resulting  friction.  For  instance,  where 
conditions  of  employment  are  determined  by  national  agree- 
ments, the  District  Councils  or  Works  Committees  should  not  be 
allowed  to  contract  out  of  conditions  so  laid  down,  nor,  where 
conditions  are  determined  by  local  agreements,  should  such  power 
be  allowed  to  Works  Committees. 

16.  Among  the  questions  with  which  it  is  suggested  that 
the  National  Councils  should  deal  or  allocate  to  District  Councils 
or  Works  Committees  the  following  may  be  selected  for  special 
mention: — 

(i)  The  better  utilization  of  the  practical  knowledge  and 
experience  of  the  workpeople. 

(ii)  Means  for  securing  to  the  workpeople  a  greater  share 
in  and  responsibility  for  the  determination  and  observance 
of  the  conditions  under  which  their  work  is  carried  on. 
(iii)  The  settlement  of  the  general  principles  governing 


272      COJNIMON  SENSE  AND  LABOUR 

the  conditions  of  employment,  including  the  methods 
of  fixing,  paying,  and  readjusting  wages,  having  regard 
to  the  need  for  securing  to  the  worki)eople  a  share  in  the 
increased  prosperity  of  the  industry, 
(iv)  The  establishment  of  regular  methods  of  negotiations 
for  issues  arising  between  employers  and  workpeople, 
with  a  view  both  to  the  prevention  of  differences,  and  to 
their  better  adjustment  when  they  appear, 
(v)  Means  of  ensuring  to  the  workpeople  the  greatest 
possible  security  of  earnings  and  employment,  without 
undue  restriction  upon  change  of  occupation  or  employer, 
(vi)  Methods  of  fixing  and  adjusting  earnings,  piecework 
prices,  etc.,  and  of  deling  with  the  many  diflficulties 
which  arise  with  regard  to  the  method  and  amount  of 
payment  apart  from  the  fixing  of  general  standard  rates, 
which  are  already  covered  by  paragraph  (iii). 
(vii)  Technical  education  and  training, 
(viii)  Industrial  research  and  the  full  utilization  of  its 
results. 

(ix)  The  provision  of  facilities  for  the  full  consideration 
and  utilization  of  inventions  and  improvement  dasigned 
by  workpeople,  and  for  the  adequate  safeguarding  of  the 
rights  of  the  designers  of  such  improvements, 
(x)  Improvements  of  processes,  machinerj',  and  organ- 
ization and  appropriate  questions  relating  to  manage- 
ment and  the  examination  of  industrial  experiments,  with 
special  reference  to  cooperation  in  carrying  new  ideas  into 
effect  and  full  consideration  of  the  workpeople's  point  of 
view  in  relation  to  them. 

(xi)  Proposed  legislation  affecting  the  industry. 
17.  The  methods  by  which  the  functions  of  the  proposed 
Councils  should  be  correlated  to  those  of  joint  bodies  in  the 
different  districts,  and  in  the  various  works  within  the  districts. 


COMMON  SENSE  AND  LABOUR      273 

must  necessarily  vary  according  to  the  trade.  It  may,  therefore, 
be  the  best  policy  to  leave  it  to  the  trades  themselves  to  formu- 
late schemes  suitable  to  their  special  circumstances,  it  being 
understood  that  it  is  essential  to  secure  in  each  industry  the 
fullest  measure  of  cooperation  between  employers  and  employed, 
both  generally,  through  the  National  Councils,  and  specifically, 
through  district  Committees  and  workshop  Committees. 

18.  It  would  seem  advisable  that  the  Government  should  put 
the  proposals  relating  to  National  Industrial  Councils  before  the 
employers'  and  workpeople's  associations  and  request  them  to 
adopt  such  measures  as  are  needful  for  their  establishment  where 
they  do  not  already  exist.  Suitable  steps  should  also  be  taken, 
at  the  proper  time,  to  put  the  matter  before  the  general  public. 

19.  In  forwarding  the  proposals  to  the  parties  concerned 
we  think  the  Government  should  offer  to  be  represented  in  an 
advisory  capacity  at  the  preliminary  meetings  of  a  Council, 
if  the  parties  so  desire.  We  are  also  of  opinion  that  the  Govern- 
ment should  undertake  to  supply  to  the  various  Councils  such 
information  on  industrial  subjects  as  may  be  available  and  likely 
to  prove  of  value. 

20.  It  has  been  suggested  that  means  must  be  devised  to 
safeguard  the  interests  of  the  community  against  possible  action 
of  an  anti-social  character  on  the  part  of  the  Councils.  We  have, 
however,  here  assumed  that  the  Councils,  in  their  work  of  pro- 
moting the  interests  of  their  own  industries,  have  regard  for  the 
National  interest.  If  they  fulfil  their  functions  they  will  be  the 
best  builders  of  national  prosi)erity.  The  State  never  parts  with 
its  inherent  over-riding  power,  but  such  power  may  be  least 
needed  when  least  obtruded. 

21.  It  appears  to  us  that  it  may  be  desirable  at  some  later 
stage  for  the  State  to  give  the  sanction  of  law  to  agreements  made 
by  the  Councils,  but  the  initiative  in  this  direction  should  come 
from  the  Councils  themselves. 


274      COMMON  SENSE  AND  LABOUR 

t 

22.  The  plans  sketched  in  the  foregoing  paragraphs  are  ap- 
plicable in  the  form  in  which  they  are  given  only  to  industries 
in  which  there  are  responsible  associations  of  employers  and 
workpeople  which  can  claim  to  be  fairly  representative.  The 
case  of  the  less  well-organized  trades  or  sections  of  a  trade  neces- 
sarily needs  further  consideration.  We  hope  to  be  in  a  position 
shortly  to  put  forward  recommendations  that  will  prepare  the 
way  for  the  active  utihzation  in  these  trades  of  the  same  practical 
cooperation  as  is  foreshadowed  in  the  proposals  made  above  for 
the  more  highly  organized  trades. 

23.  It  may  be  desirable  to  state  here  our  considered  opinion 
that  an  essential  condition  of  securing  a  permanent  improvement 
in  the  relations  between  employers  and  employed  is  that  there 
should  be  adequate  organization  on  the  part  of  both  employers 
and  workpeople.  The  proposals  outlined  for  joint  cooperation 
throughout  the  several  industries  depend  for  their  ultimate  suc- 
cess upon  there  being  such  organization  on  both  sides;  and  such 
organization  is  necessary  also  to  provide  means  whereby  the 
arrangements  and  agreements  made  for  the  industry  may  be 
effectively  carried  out. 

24.  We  have  thought  it  well  to  refrain  from  making  sug- 
gestions or  offering  opinions  with  regard  to  such  matters  as 
profit-sharing,  co-partnership,  or  particular  systems  of  wages, 
etc.  It  would  be  impracticable  for  us  to  make  any  useful  general 
reconmiendations  on  such  matters,  having  regard  to  the  varying 
conditions  in  different  trades.  We  are  convinced,  moreover, 
that  a  permanent  improvement  in  the  relations  between  employ- 
ers and  employed  must  be  founded  upon  something  other  than 
a  cash  basis.  ^Vhat  is  wanted  is  that  the  workpeople  should 
have  a  greater  opportunity  of  participating  in  the  discussion 
about  and  adjustment  of  those  parts  of  industry  by  which  they 
are  most  affected. 

25.  The  schemes  recommended  in  this  Report  are  intended 


COMMON  SENSE  AND  LABOUR      275 

not  merely  for  the  treatment  of  industrial  problems  when  they 
have  become  acute,  but  also,  and  more  especially,  to  prevent 
their  becoming  acute.  We  believe  that  regular  meetings  to  dis- 
cuss industrial  questions,  apart  from  and  prior  to  any  differences 
with  regard  to  them  that  may  have  begun  to  cause  friction,  will 
materially  reduce  the  number  of  occasions  on  which,  in  the  view 
of  either  employers  or  employed,  it  is  necessary  to  contemplate 
recourse  to  a  stoppage  of  work. 

26.  We  venture  to  hope  that  representative  men  In  each  in- 
dustry, with  pride  in  their  calling  and  care  for  its  place  as  a  con- 
tributor to  the  national  well-being,  will  come  together  in  the 
manner  here  suggested,  and  apply  themselves  to  promoting  in- 
dustrial harmony  and  efficiency  and  removing  the  obstacles  that 
have  hitherto  stood  in  the  way. 

We  have  the  honour  to  be.  Sir, 
Your  obedient  Servants, 
J.  H.  Whitley,  Chairman  A.  Susan  Lawrence 

F.  S.  Button  J.  J.  Mallon 

Geo.  J.  Carter  Thos.  R.  Ratcliffe-Ellis 

S.  J.  Chapman  Robt.  Smillie 

G.  H.  Claughton  Allan  M.  Smith 
J.  R.  Clynes  Mona  Wilson 
J.  A.  Hobson 

H.  J.  Wilson, 
Arthur  Greenwood, 
Secretariea. 
8th  March,  1917, 

In  a  further  report  the  committee  elucidated  their 
proposals  thus: 

Better  relations  between  employers  and  their  workpeople  can 
best  be  arrived  at  by  granting  to  the  latter  a  greater  share  in 
the  consideration  of  matters  with  which  they  are  concerned.    In 


276      COIMMON  SENSE  AND  LABOUR 

every  industry  there  are  certain  qu^tions,  such  as  rates  of  wages 
and  hours  of  work,  which  should  be  settled  by  District  or  Na- 
tional agreement,  and  with  any  matter  so  settled  no  Works 
Committee  should  be  allowed  to  interfere;  but  there  are  also 
many  questions  closely  affecting  daily  life  and  comfort  in,  and 
the  success  of,  the  business,  and  affecting  in  no  small  degree 
efficiency  of  working,  which  are  peculiar  to  the  individual  work- 
shop or  factory.  The  purpose  of  a  Works  Committee  is  to  estab- 
lish and  maintain  a  system  of  cooperation  in  all  these  workshop 
matters. 

We  have  throughout  our  reconmiendations  proceeded  upon 
the  assumption  that  the  greatest  success  is  likely  to  be  achieved 
by  leaving  to  the  representative  bodies  of  employers  and  em- 
ployed in  each  industry  the  maximum  degree  of  freedom  to  settle 
for  themselves  the  precise  form  of  Council  or  Committee  which 
should  be  adopted,  having  regard  in  each  case  to  the  particular 
circumstances  of  the  trade;  and,  in  accordance  with  this  principle, 
we  refrain  from  indicating  any  definite  form  of  constitution  for 
the  Works  Committees.  Our  proposals  as  a  whole  assume  the 
existence  of  organizations  of  both  employers  and  employed 
and  a  frank  and  full  recognition  of  such  organizations.  Works 
Committees  established  otherwise  than  in  accordance  with  these 
principles  could  not  be  regarded  as  a  part  of  the  scheme  we  have 
recommended,  and  might  indeed  be  a  hindrance  to  the  develop- 
ment of  the  new  co-relations  in  industry  to  which  we  look  for- 
ward. We  think  the  aim  should  be  the  complete  and  coherent 
organization  of  the  trade  on  both  sides,  and  Works  Committees 
will  be  of  value  in  so  far  as  they  contribute  to  such  a  result. 

We  are  of  opinion  that  the  complete  success  of  Works  Commit- 
tees necessarily  depends  largely  upon  the  degree  and  efficiency 
of  organization  in  the  trade,  and  upon  the  extent  to  which  the 
Committees  can  be  linked  up,  through  organizations  that  we 
have  in  mind,  with  the  remainder  of  the  scheme  which  we  are 


COMMON  SENSE  AND  LABOUR      277 

proposing,  viz.,  the  District  and  National  Councils.  We  think 
it  important  to  state  that  the  success  of  the  Works  Committees 
would  be  very  seriously  interfered  with  if  the  idea  existed  that 
such  Committees  were  used,  or  likely  to  be  used,  by  employers 
in  opposition  to  Trade  Unionism.  It  is  strongly  felt  that  the 
setting  up  of  Works  Committees  without  the  cooperation  of  the 
Trade  Unions  and  the  Employers'  Associations  in  the  trade  or 
branch  of  trade  concerned  would  stand  in  the  way  of  the  im- 
proved industrial  relationships  which  in  these  Reports  we  are 
endeavouring  to  further. 

In  an  industry  where  the  workpeople  are  unorganized,  or 
only  very  partially  organized,  there  is  a  danger  that  Works 
Committees  may  be  used,  or  thought  to  be  used,  in  opposition 
to  Trade  Unionism.  It  is  important  that  such  fears  should  be 
guarded  against  in  the  initiation  of  any  scheme.  We  look  upon 
successful  Works  Committees  as  the  broad  base  of  the  Industrial 
Structure  which  we  have  recommended,  and  as  the  means  of 
enlisting  the  interest  of  the  workers  in  the  success  both  of  the 
industry  to  which  they  are  attached  and  of  the  workshop  or 
factory  where  so  much  of  their  life  is  spent.  These  Committees 
should  not  in  constitution  or  methods  of  working  discourage 
Trade  organization. 

Works  Committees,  in  our  opinion,  should  have  regular  meet- 
ings at  fixed  times,  and,  as  a  general  rule,  not  less  frequently 
than  once  a  fortnight.  They  should  always  keep  in  the  forefront 
the  idea  of  constructive  cooperation  in  the  improvement  of  the 
industry  to  which  they  belong.  Suggestions  of  all  kinds  tending  to 
improvement  should  be  frankly  welcomed  and  freely  discussed. 
Practical  proposals  should  be  examined  from  all  points  of  view. 
There  is  an  undeveloped  asset  of  constructive  ability — valuable 
alik*  to  the  industry  and  to  the  State — awaiting  the  means  of 
realization;  problems,  old  and  new,  will  find  their  solution  in  a 
frank  partnership  of  knowledge,  experience,  and  good  will.  Works 


278      COMMON  SENSE  AND  LABOUR 

Committees  would  fail  in  their  main  |)urpose  if  they  existed  only 
to  smooth  over  grievances. 

We  recognize  that,  from  time  to  time,  matters  will  arise  which 
the  management  or  the  workmen  consider  to  be  questions  they 
cannot  discuss  in  these  joint  meetings.  When  this  occurs,  we 
anticipate  that  nothing  but  good  will  come  from  the  friendly 
statement  of  the  reasons  why  the  reservation  is  made. 

We  regard  the  successful  development  and  utilization  of 
Works  Committees  in  any  business  on  the  basis  recommended  in 
this  Report  as  of  equal  importance  with  its  commercial  and  scien- 
tific efficiency;  and  we  think  that  in  every  case  one  of  the  partners 
or  directors,  or  some  other  responsible  representative  of  the  man- 
agement, would  be  well  advised  to  devote  a  substantial  part  of 
his  time  and  thought  to  the  good  working  and  development  of 
such  a  coramittee. 

There  has  been  some  experience,  both  before  the  war  and 
during  the  war,  of  the  benefits  of  Works  Committees,  and  we 
think  it  should  be  recommended  most  strongly  to  employers  and 
employed  that,  in  connection  with  the  scheme  for  the  establish- 
ment of  National  and  District  Industrial  Councils,  they  should 
examine  this  experience  with  a  view  to  the  institution  of  Works 
Conmiittees  on  proper  lines,  in  works  where  the  conditions  render 
their  formation  practicable.  We  have  recommended  that  the 
Ministry  of  Labour  should  prepare  a  sununary  of  the  experience 
available  with  reference  to  Works  Committees,  both  before  and 
during  the  war,  including  information  as  to  any  rules  or  reports 
relating  to  such  Committees,  and  should  issue  a  memorandum 
thereon  for  the  guidance  of  employers  and  workpeople  generally 
and  we  understand  that  such  a  memorandum  is  now  in  course 
of  preparation. 

In  order  to  ensure  uniform  and  common  principles  of  action, 
it  is  essential  that  where  National  and  District  Industrial  Councils 
exist  the  Works  Committees  should  be  in  close  touch  with  them. 


COMMON  SENSE  AND  LABOUR      279 

and  the  scheme  for  linking  up  Works  Committees  with  the  Councils 
should  be  considered  and  determined  by  the  National  Councils. 

We  have  considered  it  better  not  to  attempt  to  indicate  any 
specific  form  of  Works  Committees.  Industrial  establishments 
show  such  infinite  variation  in  size,  number  of  persons  employed, 
multiplicity  of  departments,  and  other  conditions,  that  the  par- 
ticular form  of  Works  Committees  must  necessarily  be  adapted 
to  the  circumstances  of  each  case.  It  would,  therefore,  be  impos- 
sible to  formulate  any  satisfactory  scheme  which  does  not  pro- 
vide a  large  measure  of  elasticity. 

It  will  be  perceived  that  the  controlling  thought  is 
to  establish  a  government  for  trade  on  constitutional 
lines,  recognizing  that  the  employers  constitute  one 
class  and  the  employees  another,  and  that  each  can 
best  treat  collectively.  It  puts  industry  into  the  con- 
trol of  the  employers  and  the  unions. 

The  two  glaringly  weak  spots  are  that  the  public  is 
not  considered  and  that  no  check  exists  against 
building  up  guilds  of  infinite  power.  For  instance,  a 
combination  of  the  owners  and  workers  in,  say,  the 
engineering  trades  would  have  almost  a  mastery  of 
the  government  of  the  country  while  a  combination 
of  two  or  three  of  the  greatest  trades  would  have 
absolute  mastery.  Another  point  of  weakness  is 
that  the  association  is  voluntary  and  the  decisions 
of  the  councils  are  not  backed  by  other  than  public 
opinion.    But  since  public  opinion  is  more  powerful 


280      COMMON  SENSE  AND  LABOUR 

than  any  government,  this  is  an  apparent  rather  than 
an  actual  weakness. 

The  reception  of  the  plan  has  been  various.  It  was 
adopted  by  Parliament  and  has  the  support  of  most 
union  leaders  although  some  of  them  give  but  lip 
service.  The  shop  stewards  replied  with  a  mani- 
festo of  their  own  which  well  illustrates  the  diver- 
gence of  opinion  on  industrial  matters.  The  main 
points  of  this  manifesto  are ; 

Working  hours  to  be  forty  per  week,  to  tenninate  at  6.  p.  m. 
on  Friday.  If  there  are  two  shifts  they  shall  be  from  6  a.  m. 
till  2  p.  M.,  and  from  2  p.  m.  till  10  a.  m.  If  there  are  three  shifts, 
the  third  shall  be  from  10  p.  m.  till  6  a.  m.,  but  this  shall  count 
as  twelve  hours  for  payment,  and  not  eight.  In  every  case 
there  shall  be  a  break  of  half-an-hour  for  a  meal,  included  In  the 
eight  hours  and  paid  for. 

When  the  Unemployed  Register  of  the  Trades  Union  concerned 
reaches  two  and  a  half  per  cent,  the  Unions  reserve  to  themselves 
the  right  to  order  any  reduction  of  hours  they  consider  necessary, 
and  such  shorter  hours  shall  carry  the  full  week's  wages. 

Overtime  shall  not  be  allowed  except  in  very  special  cases.  Each 
case  must  be  submitted  by  the  employers  to  the  Union  for  consent 
before  any  overtime  is  worked,  except  in  cases  of  sudden  "break- 
down," when  the  Shop's  Committee  shall  be  allowed  to  decide 
on  the  merits  of  the  case.    All  overtime  to  be  paid  double  time. 

Where  payment  by  results  is  in  operation,  or  is  introduced, 
it  shall  only  be  allowed  on  a  Fellowship  system. 

Arrangements  to  be  made  for  ten  days  per  annum  to  be  ob- 
served as  holidays  at  the  customary  periods.    Wlien  they  fall 


COMMON  SENSE  AND  LABOUR      281 

on  a  Saturday  or  a  Sunday  the  following  working-day  sliall  con- 
stitute the  holiday.  In  addition  an  arrangement  shall  be  made 
for  each  worker  to  have  two  clear  weeks'  holiday  per  annum  at 
convenient  dates.    All  holidays  to  be  paid  for. 


As  regards  out-working  allowances,  if  the  worker 
cannot  get  home  at  night,  he  is  to  receive  his  full 
wages,  plus  75  per  cent.,  plus  travelling  expenses. 
Regulations  affecting  apprenticeship  prescribe  that 
there  shall  be  not  more  than  one  apprentice  for 
every  three  journeymen,  with  payment  all  the  time 
on  a  most  generous  scale. 

No  man  is  to  be  called  upon  to  work  more 
than  one  machine  at  a  time  unless  the  machines 
are  purely  automatic,  or  unless  the  sanction  of  the 
Shop  Committee  and  of  the  unions  has  first  been 
obtained. 

In  the  event  of  disputes,  there  shall  be  a  conference 
between  the  employers  and  the  trades  union,  which 
must  be  held  within  seven  days.  There  shall  be  no 
cessation  of  work  pending  the  conference,  and  the 
conditions  prevailing  prior  to  the  dispute  shall  op- 
erate until  agreement  is  reached. 

When  the  workman  wishes  to  leave,  he  is  to  do  so 
without  prejudice  from  his  employer,  provided  he  has 
given  notice  of  his  intention  to  the  Works  Committee. 


282      COMMON  SENSE  AND  LABOUR 

The  whole  Joint  Industrial  Council  scheme  is,  at 
the  time  of  writing,  in  the  formative  stage.  TMiether 
or  not  it  will  be  a  success  remains  to  be  seen.  Since 
its  adoption  many  and  more  serious  strikes  have 
taken  place  in  Great  Britain  than  ever  before  and  a 
national  conference  had  to  be  called  for  the  unionists 
and  the  employers  to  discuss  ways  and  means.  They 
did  not  arrive  at  any  concrete  conclusions  and  it  is 
not  safe  to  generalize  on  either  success  or  failure. 
The  best  criticism  that  has  yet  been  written  and 
which  points  out  the  possibilities  of  success  as  well  as 
the  possibilities  of  failure  is  this  from  the  London 
AthencBum: 

Experience  will  probably  sliow  how  loyal  tyto  the  trades  union 
can  exist  side  by  side  with  loyalty  to  the  shop.  Profit-sharing 
and  co-partnership  have  endeavoured  to  breed  a  shop  loyalty  on  a 
cash  basis  and  have  failed.  The  Workshop  Committee  may  pro- 
vide a  better  way  through  the  development  of  real  joint  control. 
The  new  Shop  Stewards'  Movement — one  of  the  most  significant 
developments  of  the  war  period — is  based  upon  the  shop.  It  is 
the  local  side  of  industrial  unionism,  seeking  to  weld  the  workers 
together,  irrespective  of  craft  or  degree  of  skill.  It  is  a  product 
of  the  spirit  which  is  demanding  **control  by  the  workers." 
The  movement  has  created  some  consternation  in  official  circles. 
Its  spontaneity  is  a  sign  that  it  has  arisen  in  response  to  new 
needs,  and  it  may  be  taken  for  granted  that  it  will  continue  to 
grow.  It  must,  therefore,  be  reckoned  with  in  the  future.  It 
is  for  industrial  organizations  to  find  a  place  for  the  Shop  Stew- 


COMMON  SENSE  AND  LABOUR      288 

ards'  Movement  in  the  industrial  constitution.  It  may  be  that 
it  will  be  coordinated  with  both  the  Joint  District  Council  and 
the  Workshop  Committee. 

This  triple  organization  of  national,  district,  and  shop  ma- 
chinery, if  it  be  honestly  applied  and  the  many  difficulties  faced, 
will  mark  a  great  step  forward.  It  is  urged  by  some  that  it 
cannot  be  successfully  worked  under  a  capitalist  system.  This 
may  be  true,  but  joint  control  in  private  industry  is  not  a  worse 
state  of  afifairs  than  the  bureaucratic  control  of  public  services. 
If  joint  control  is  to  be  postponed  until  industries  pass  under 
public  ownership,  the  trades  union  movement  will  have  a  long 
time  to  wait,  and  when  the  time  did  arrive,  it  would  find  the 
workers  unfamiliar  with  the  problems  of  industrial  administra- 
tion, and  public  ownership  would  mean  an  industrial  bureaucracy. 

Considering  the  Report  as  a  whole,  and  the  possibilities  which 
are  latent  in  it,  we  must  realize  that  it  marks  a  fresh  departure 
in  industrial  relations.  It  gives  a  new  importance  to  both  em- 
ployers' and  workpeople's  organizations,  and  it  offers  a  new 
status  to  the  worker  and  the  worker's  representatives.  It  is 
the  first  large  attempt  which  has  been  made  to  solve  the  question 
of  industrial  government.  Its  proposals  are  moderate  and  tenta- 
tive; it  indicates  but  the  first  steps;  it  leaves  the  final  questions 
of  ownership  and  control  open.  The  recommendations  of  the 
Sub-Committee  have  been  made  in  view  of  all  the  existing  cir- 
cumstances, and  represent  what  appears  to  be  immediately  pos- 
sible. The  Report  is  obviously  in  line  with  modern  thought. 
It  is,  for  example,  an  attempt  to  apply  the  principle  of  decentral- 
ization. Geographical  devolution  and  functional  devolution 
are  both  attempts  to  relieve  the  congestion  of  the  central  author- 
ity, and  to  bring  government  into  closer  contact  with  the  gov- 
erned and  with  the  living  problems  of  government.  Further, 
it  is  a  recognition  of  the  right  of  the  human  being,  whatever  his 
economic  and  social  circumstances,  to  human  treatment;  and 


284      COMMON  SENSE  AND  LABOUR 

human  treatment  means  not  so  much  the  provision  from  above 
of  better  conditions  of  life,  as  the  provision  of  opportunities 
for  obtaining  those  conditions. 

We  can  fully  understand  that  when  an  industry  settles  itself 
down  to  the  task  of  applying  the  Report,  it  will  meet  with  many 
difficulties,  some  of  which  are  connected  with  industrial  organiza- 
tion. There  is  UtUe  cohesion  among  employers,  though  the 
contrary  view  is  widely  held.  In  the  case  of  workpeople  over- 
lapping unions  present  many  obstacles,  whilst  the  new  responsi- 
bilities of  the  trades  unions  will  necessitate  a  reorganization  which 
will  not  be  rapidly  completed.  But  the  fact  that  the  Report 
has  been  so  favourably  received  by  all  except  the  backwoodsmen 
amongst  the  employers,  and  a  small  irreconcilable  minority 
amongst  the  workers,  shows  that  there  is  a  general  willingness 
to  give  the  Report  a  chance.  It  is  important,  however,  that 
employers  as  a  whole  should  recognize  that  they  must  be  pre- 
pared to  sacrifice  some  of  their  powers — that,  in  a  word,  the 
day  of  industrial  autocracy  is  rapidly  drawing  to  a  close.  The 
employers  must  adjust  themselves  to  the  new  circumstances. 
And  as  the  trades  union  movement  becomes  more  and  more 
articulate,  it  will  become  less  and  less  inclined  to  tolerate  autoc- 
racy at  home.  Industry  is  the  last  citadel  of  irresponsible 
government  and  oligarchic  authority  in  this  country.  The 
war  has  sharpened  men's  appetites  for  freedom  and  given  new 
zeal  to  the  demand  for  an  industrial  democracy.  The  ways  of 
approach  to  this  goal  are  many.  An  industrial  constitution 
opening  up  avenues  to  wider  and  wider  powers  of  self-government 
is  one  of  the  most  important.  The  Report  of  the  Reconstruction 
Sub-Conmiittee  modestly  opens  a  door  through  which  employers 
and  workers  may  slowly  pass  into  a  new  industrial  order. 

THE    END 


THE  COXJiTTtY  UTK  PIESS,  GARDZS  CITY,  NEW   YORK 


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